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Our UK Reward Management Survey is currently open, surveying HR and reward professionals about the topical issues they face – particularly those around recruitment and retention.

Difficulty hiring and maintaining a strong pipeline of talent is driven by a myriad of factors. Most global industries are currently facing a skills crisis, making recruitment and retention of key individuals more challenging. Here we outline the initial response to our survey and the five key ways in which employers are revising their strategies to attract and retain.

The recruitment and retention landscape

In the last six months, 69 per cent of respondents so far have reported difficulties in retaining people, while 62 per cent anticipate similar challenges over the next six months. Similarly, in the last six months, 75 per cent of respondents so far have had difficulty recruiting people. 65 per cent of respondent employers anticipate recruitment challenges ahead in the next six months. The high number of job adverts remains sustained, underlining how important it is for organisations to be clear about what they are offering existing and prospective employees.

The majority of respondent employers, 94 per cent, cite ‘labour shortages in the market’ as a challenge that they sometimes or often experience. This is followed by 93 per cent of respondents so far saying that they encounter a ‘lack of suitable candidates’. The pipeline of talent in specialist areas is reportedly acute in the UK labour market. Driven by the Great Resignation in the wake of the pandemic, many took the opportunity to retire or retrain post-pandemic.

1. Skills-first recruitment and retention

The World Economic Forum advocates for a ‘skills-first approach’ when filling positions. This hiring approach offers companies the opportunity to fill critical skill gaps by broadening the range of candidates they consider. By setting qualifications as a pre-requisite, this eliminates a high proportion of the labour market from the outset.

Therefore, to pave the way for greater social mobility too, they recommend that candidates should be primarily assessed on their skills and abilities. This helps to overcome the issue that demand is outstripping the supply of talent across a number of sectors. Instead, individuals can be developed and retained by eliminating academic qualifications as an automatic hurdle that candidates need to meet.

2. Offering an incentive to join

Reported pay levels for 2023 range from five per cent in the lower quartile to 6.5 per cent in the upper quartile, driven primarily by external relativities, including inflation. With budgets being squeezed for employers and employees alike during the ongoing cost of living crisis, organisations that can offer competitive pay in addition to immediate benefits upon joining are winning the war on talent. Benchmarking pay data can help pay levels across the organisation remain competitive, with line managers being able to offer evidence-based reward packages that are objectively fair.

62 per cent of respondents to our survey so far report that they have had to offer new recruits salaries which conflict with those paid to existing employees. 65 per cent of these have had to offer up to 10 per cent more than those paid to current incumbents, with 35 per cent offering up to 20 per cent more. This is popular in sectors particularly affected by skills shortages, including renewables, construction and utilities.

Around half of our respondents think that the need to offer a premium will stay the same over the next six months. It is important for organisations to consider whether this is a sustainable, long-term approach or whether this risks undermining internal pay equity across the organisation for short-term benefit. Joining bonuses are a popular alternative, preserving the pay frameworks in place.

3. Cultivating a strong employee value proposition

When it comes to tackling recruitment and retention challenges, the most common strategy respondents are adopting is ‘analysing the results of ‘exit interviews’’. This is followed by three quarters of respondent employers focused on ‘communicating to employees the wider reward package’. Just under three quarters of responses focus on technology, such as using LinkedIn as a recruitment tool.

60 per cent are making greater use of internal recruitment. This reflects a trend towards upskilling within the existing workforce who are familiar with the organisation and its products and services. By creating a strong sense of what the organisation stands for in terms of its culture, through its benefits package and how its workplace is designed, employers can foster greater loyalty and drive down employee turnover.

4. Upskilling in fast-moving sectors

Ongoing learning and development opportunities can overcome recruitment and retention challenges. In the food and drink industry in particular, one veteran reports that the sector has a ‘famed lack of succession planning’ which has impacted the effect of recruitment and retention challenges in the wake of the pandemic. In addition to those over 50 who have mortgages paid off and do not want to return to work, combined with 500,000 talented individuals leaving the workforce, this has created a huge skills gap.

The tech industry faces similar challenges, with an over 1000 per cent increase in the demand for data skills since 2019, with tech vacancies reaching a 10-year high. In Northern Ireland, 60 per cent of employers are reporting that they are increasing their graduate intake to overcome recruitment challenges. Upskilling current staff from the outset can build a strong pipeline of talent for the future of the business, while also being one way to immediately plug the recruitment gap.

By considering what individuals require through equity, diversity and inclusion programmes, support can be tailored to their requirements. For example, given that the tech sector is constantly innovating, returnship programmes are offered to professionals that are returning to the workforce following a career break. Accenture, Entain and Amazon all offer these paid programmes, setting the returner up for success.

5. Redefining the work–life balance

With the greater focus on wellbeing that goes beyond physical, to encompass mental health and financial security, people are redefining how they work and live. In the wake of the pandemic and the greater flexibility introduced by hybrid working patterns, drawing from a wider geographic pool of talent is one way to use flexible working arrangements to a company’s advantage when recruiting and retaining people.

Delivering greater flexibility through hybrid working models can help employees balance their work with wider commitments, with one in three offering flexible benefits that they can tailor to their own priorities and one in five employers considering this approach.  Greater communication with employees around the awards on offer to them, sharing success stories of those who have returned to organisations and why, and offering employees bonuses to refer candidates are all ways in which communication strategies can help retain talent.

People are also placing greater value on being treated as individuals. Policies to acknowledge the support employees require at different milestones such as fertility treatments, the menopause or adoptions can deliver true value, making them choose job security over the prospect of a higher pay elsewhere.

Get in touch

We hope this has given you some ideas about what other employers are doing to counter their recruitment and retention challenges. Call us today to discuss how we can help you attract and retain the right talent and key skills to deliver your strategy. In the meantime, take part in our survey to receive a free copy of the results in our UK Reward Management Survey Report. Here you will find the latest HR best practices and trends across a variety of sectors.

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