Talent shortages are being increasingly felt by employers across the UK. From the recent, widely publicised issues at Heathrow Airport through to hospitality, education and technology, to name just a few, it seems there aren’t many sectors immune to the challenge of trying to find staff.
Growth organisation Tech Nation recently reported that two million job vacancies in the last year in the technology sector risk stifling growth, while the British Chambers of Commerce found that 75 per cent of companies are experiencing hiring difficulties. A shrinking workforce is regarded as an urgent problem, with reports describing Britain being in the grip of an employment crisis.
This situation can feed a survival instinct among organisations, especially as there’s no clear consensus on what the long-term solution is for remedying talent shortages and skills gaps. As the debate continues, employers will understandably look at the actions they can take to attract and retain staff. Money is often favoured as a solution, and the current spell of high inflation and associated cost of living squeeze complicates the situation.
Offering to pay higher salaries is seen as a means of beating competition when recruitment gets tough. Financial incentives and bonuses will also be offered to enhance employment appeal, encouraging talent to see the opportunity from switching jobs, convince leavers to return to an employer or sector, or even the world of work. They are also tactics that can help people to put aside reservations about a particular role.
When time is of the essence during staffing shortages, the extra investment in remuneration can seem worth it, especially if it helps resolve operational issues affecting customer satisfaction, productivity levels and the bottom line. It may, however, often only address part of the problem.
Organisations have to look at the immediate need, but also have to look beyond the current challenges of staffing shortages and remain focused on the core principles of their talent strategies. Hiking new starter salaries and bonus payments can cause discontent among existing staff or risk creating salary and reward structures that become unsustainable in the longer term.
Talent strategy must be based on sound knowledge of internal and external talent pools. This allows understanding of people’s motivations, including why they do or don’t want to work in a particular role and what they want in the longer term (including development and advancement). In a candidate-led market, where life after lockdown has had a profound effect on what we want and what we expect, this approach has become even more important.
Good talent intelligence complements good workforce planning. Integrating unstructured data (for example, social media comment and ratings), candidate motivations, engagement survey outcomes and getting underneath what makes people stay, as well as why people are leaving, provides a richer picture and the basis of a robust approach to spot future problems within the workforce. It can also inform engagement in the external market. Organisations should know what motivates potential employees, both personally and professionally, and what would attract them to join their organisation and work in that particular sector.
Currently, candidates have many more opportunities in the market and are increasingly looking beyond a job as being the defining event of their lives. The power has shifted from employer to employee, and organisations must work harder to shape employment opportunities that meet people’s expectations.
Our experience shows that attracting and retaining staff is about more than money. While the pay must be within the right bracket, which is acceptable and attractive to candidates, elements around work-life balance have become much more attractive post lockdown. We’re increasingly working with organisations to evolve salary benchmarking towards reward insight in the broader sense. Effort is invested in determining what the overall employment package is that appeals to staff and exactly makes them want to stay with an employer.
By better understanding the wider aspects of rewards and work-life balance, employers can strengthen employee retention, which proves one of the most effective means of preventing staffing shortages. This knowledge also helps to better connect them with candidates and establish talent pools, giving them an edge when they do need to recruit.
David Baty is a partner at New Street Consulting Group