Why your people are your most important investment in a recession

To retain staff, businesses should do away with the ‘normal’ approach to HR and invest in a holistic, data-led method, says Colin Wilford

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 The world of employment is going through a period of fast-moving change that we haven’t seen in generations. Critical vacancies remain unfilled, employee retention rates are slumping, and the emerging ‘quiet quitters’ phenomenon is seeing an increasingly prevalent employee market.

The evolution of the workplace, accelerated in part by the pandemic, has seen new employees  have higher standards and expectations of their employers than previous generations. Companies are under more and more pressure to retain staff and, in particular, to hold on to their top talent. The cost of staff turnover to a business is eye-wateringly high; according to research by Oxford Economics, the average cost of turnover per employee earning £25,000 a year or more, is £30,000-plus – more than 100 per cent of the average yearly salary. 

As businesses face multiple layers of pressure, with double-digit inflation and rising operational costs combined with wider stress points as a result of the emerging recession, they do not want to be incurring unnecessary costs because of weak hiring and subsequent high staff turnover. 

Doing HR well is tricky in normal times, let alone in a period of economic uncertainty and a jobs market in flux. But if companies are to weather this stormy period, their people teams need to put data at the heart of everything they do. This will allow them to recruit the right people, better understand how their employees are motivated, help leaders run more effective teams, support the delivery of bespoke training that boosts productivity, and ultimately drive a culture that ensures retention.

If businesses get this right, they can create a culture that gives them the best chances of not just surviving the recession but actually flourishing, and then being positioned to take advantage of post-recession opportunities.

So how can organisations get their culture right, particularly in times of crisis? Businesses need to reset what they know to be the ‘normal’ approach to HR and invest in a holistic, data-led one.

The only way they can rise to the challenge is by boldly investing in a people strategy, which puts psychometric testing at its heart to truly understand employees and what makes them tick.

When businesses make the time to assess people correctly, both when hiring and as an employee, they not only understand where they best fit into the company, but also their motivations, attitudes, behaviours, strengths and development areas. This is particularly important during times of uncertainty, when forming the best, most effective teams have never been more important. A business is only as strong as its weakest link in the team. That weakest link can easily be identified, understood and supported to succeed.

Through comprehensive assessments, detailed data can provide the most valuable information to bosses to inform their decision making about how they form teams, how those teams should work together, and how individuals can be developed once they’re part of the team. 

Psychometric testing often gets a bad wrap, but a combination of scientifically proven market-leading tools, tailored with a personalised and in-depth development programme, can achieve three things. First, companies can find employees that are the right fit for their company, the specific role, and the wider departmental and organisational culture. High-quality, data-led assessments, tailored to your business needs, give you the best chance to get an all-round view on candidates. From personality to emotional intelligence to skills, it’s necessary to get a holistic view of a candidate's suitability to the job, and also their cultural fit within the company. If this is done correctly, that makes the path ahead that much easier and more effective.

Second, data can help leaders understand how different employees, with different strengths and skillsets, are best able to work together. There is no better way to build collaborative and productive teams than using the insight that psychometric testing provides. Establishing powerful teams is key to building a stronger company culture where everyone feels that they have a stake, complement each other's skills, and are all driving towards the same outcome. 

Third, data doesn’t just tell you about your employees’ skills. You can understand their attitudes, their aspirations, and how they’re best motivated. By better understanding this, managers and colleagues can make team members feel more motivated and create a proper development culture as a result. Recognising employees' development points, and knowing how to coach and develop them to raise their potential, will make your company performance more productive as well as making it a healthier and happier place for employees to work. This gives businesses the best chance of raising retention rates.

A data-led approach isn’t a silver bullet, but it’s a vital part of the answer during these challenging times. Your people are your most important asset, and investing in them effectively will be vital to your survival.

Colin Wilford is CEO of Wilford Scholes