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The skills shortage is exacerbating the workforce gaps that face many employers. As part of our UK Reward Management Survey, which is currently live, we are asking respondents to outline the recruitment and retention challenges they are facing and the strategies they are putting in place to overcome the ongoing war for talent. Share your views with us.

The current landscape of recruitment and retention challenges

Two thirds of respondents so far to our UK Reward Management Survey are facing challenges when it comes to attracting and retaining employees. The employment market is buoyant, with worker shortages facing a record high of 1.3 million during 2022. Increasingly, people are happy to change jobs where they can command a higher premium, especially during the cost-of-living crisis. However, this does not necessarily mean that employers are receiving the applicants that they need for the roles.

Across a variety of sectors, HR professionals are facing the issue of a lack of suitable candidates. The government is being urged to axe the shortage occupation list, which is intended to help plug chronic labour shortages based on skillsets. Employers can fill vacant jobs for defined occupations on 80 per cent of the standard wage for the role, at the minimum annual rate of £20,960.

The Migration Advisory Committee argues that it risks leaving workers vulnerable and exploited. According to Professor of Economics at King’s College London and Chair of the MAC Brian Bell: “No employer should be able to pay below the ‘going rate’ regardless of whether they are experiencing shortage.”

However, certain industries such as manufacturing, hospitality and agriculture, are facing immediate labour issues. This is further complicated by increasing UK immigration fees in relation to work and visit visas, which has been condemned by The Royal College of Nursing for its impact on health and care workers.

Beyond immigration policy questions facing the government, what are the key changes that employers can implement to bolster their recruitment and retention approach?

1. Talent management

As the government is being implored by businesses to develop a wider skills policy that embeds lifelong learning to avoid future skills shortages, Rishi Sunak has discussed the potential of making maths compulsory beyond 16, until the age of 18. This is in line with business leaders calling for the education system to embrace and cultivate a system of lifelong learning to boost skillsets.

Learning and development is a key part of a total reward strategy. Individuals expect this investment in their future, through further training opportunities being offered to them as part of their career progression. Leadership skills are under scrutiny after a series of CEO scandals, raising the question of whether people, with the support of organisations, are identifying the correct training they require for the long-term. Leadership skills must be fostered from the outset of careers, while many are promoted through organisations based on merit and proficiency in their immediate roles. They may be technically excellent at their role, but this does not automatically translate to the skillsets required by managers.

2. Actively listen to employees

Personnel Today has reported that almost one fifth of UK workers, around 5.5 million people, feel undervalued at work. In order for people to feel like they are understood in their role, employee opinion surveys are a great way to actively listen to employees to ensure their needs and priorities are being met at work. Greater analysis of exit interviews can also surface useful insights to act upon if a leaver identifies a current issue.

By establishing a feedback loop and communicating any actions the organisation has taken as a result of their employees’ views, this builds a strong culture throughout the business. Following up with employees through a strong communications plan to share the insights and correlating action shows that the company is committed to learning from its employees about what best practice looks like to them, driving employee engagement.

3. A strong employee value proposition

Positive workplaces that enable their employees to thrive can drive down employee turnover, creating places that people want to join and stay. Whether people are proud of the difference their employer is making when it comes to their diversity, equity and inclusion record, or the role they are playing in minimising their environmental impact, employees who take pride in their employer’s mission and purpose buy-in to the employee value proposition.

Defined by the CIPD as ‘a set of attributes, often intangible, that make an organisation distinctive, promise a particular employment experience and appeal to people who thrive in its culture,’ employee value propositions can drive employee engagement. Those who articulate theirs and get employees to want to be part of their purpose can overcome the recruitment and retention challenges they face.

4. Fair remuneration and enhanced benefits

Given the current climate of economic uncertainty, especially during times of constrained pay, employees want to know they are being paid fairly. Many UK Reward Management Survey respondents so far are looking at internal pay equity and looking at their job roles, ensuring they have an objective system in place for organising the remit of roles and the framework for pay.

Sometimes referred to as ‘golden handcuffs’ as incentives to stay, non-consolidated payments to employees are more common as employers seek to support their staff who face escalating costs during the cost-of-living crisis. Similarly, others are offering enhanced benefits to reduce the impact, such as greater use of hybrid working to cut down commuting costs.

5. Reviewing recruitment strategies

Greater use of external and internal recruitment agencies can help teams source and interview the best talent. Getting the messaging right about what the organisation offers, what differentiates it from competitors and the total reward package can help to attract the right candidates who fit well with the culture.

Others are making greater use of technology, taking the opportunity offered by LinkedIn to reach a wider audience of potential new recruits with job adverts being pushed out on the platform. Our spring 2023 UK Reward Management Survey revealed that 59 per cent offered new recruits conflicting salaries than those offered to current staff. 65 per cent offered salaries of up to 10 per cent more, highlighting how many are using golden handshakes as a recruitment tool.

Get in touch

Make sure you take the chance to contribute your views on the ongoing war for talent and how this is affecting your workforce planning in our UK Reward Management Survey which is now open.

In return for fifteen minutes of your time, you will receive insights into the key trends affecting HR and Reward Specialists in 2023/2024, as we will send you a full copy of our UK Reward Management Autumn 2023.

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