In challenging economic times it is more important than ever to recruit and retain staff, a stable and skilled workforce is essential. Samantha Mullins, Director of Latitude HR, and Laura McFadyen Partner in the Employment team at Stephens Scown consider the positive steps employers can take to recruit and retain staff in 2024.
When employee values are clearly understood and embedded in the culture of an organisation, people are keen to join, motivated to do a good job and want to stay. This leads to better recruitment decisions, higher productivity, lower absence, less turnover, and, ultimately more profit. So why do these ‘softer’ people elements so often get overlooked?
A still key report from the CIPD (Resourcing and Talent Planning Report 2022) suggests that the cost of recruitment is between £1.5K and £3K per head. This means that, on average, for every 100 employees, companies are paying in the region of £50-£100K in direct recruitment costs alone. Factor in that new employees take 6-12 months to be fully productive and you realise the indirect costs will be much higher. Given the current labour shortages and that two out of five employers (42%) have vacant posts that are difficult to fill, why aren’t companies doing more to retain their workforce?
There is much to be gained from investing more purposefully in your people but when money gets tight it is often learning and staff investment budgets that get cut. Companies can gain a real competitive advantage through taking a people-led approach and this article explores how companies can do that through recruitment, engagement and retention activity.
Recruitment
This is the shop window and front door to your company so you want to ensure that you are attracting the right talent pool and making good selection decisions.
Employees are now more discerning about the organisations they choose to work for. More and more people are looking for ethical employers, they want to know how they will be treated if they join your workforce. To get them interested, you need to ensure that your attraction message clearly states what people can expect from you as an employer.
Your attraction and selection processes need to be fair and equitable to all that apply. It should assess more than just the technical skills and take into account the values and behaviours that candidates will bring. Also consider where you are advertising and the messages you are giving. This can be key in attracting a diverse talent pool. In a competitive recruitment market, the more diverse the pool we can attract applicants from, the more likely we are to find the talent we need.
Are you flexible-by-default? Do you offer hybrid working? Do you advertise in places where under-represented populations are looking and have you created opportunities, such as apprenticeships and return to work schemes (for example for older recruits), that provide different entry routes into your company? All these are important elements within your recruitment strategy.
What the company is talking about on social media is critical. Candidates want to understand their stance on the issues that are important to them, such as, the environment and their social commitments. It is these things that will turn a passive observer into an active applicant.
Employee Engagement
Don’t overlook the importance of good, clear communication. Employees don’t expect their bosses to never make the wrong decisions or tell them everything that is going on, but they do want to be kept informed of the big picture. These days that needs to come through multiple routes including emails, intranet, webinars, internal social media channels and face-to-face. The absence of communication can lead to distrust and rumour and damage the relationship between employee and employer.
Opportunities to hear from employees is really important and crucial for business growth and innovation. Identify ways that employees can provide feedback whether that be through staff surveys, focus groups or via other forums and be sure to feedback what has happened as a result. In our experience, organisations that have regular feedback built into what they do (both from the business and from employees), have less issues implementing change and less formal grievance and disciplinary processes to manage.
Employee engagement can also support you as an organisation to live your core values. Having conversations about the wider issues that matter to people in your company should inform your corporate social responsibility (CSR) strategy. When done well, the impact will be greater and people will feel more connected to the company especially if there is alignment with their personal values.
Retention
It takes between 6-12 months for new employees to be fully productive so purposeful retention strategies are key. Salary will always be important, however it isn’t enough on it’s own and it may not always be possible to keep increasing pay. Employees want to understand the total reward package and there are opportunities within this to offer alternative options that are valuable to people and will encourage them to stay, this could include:
- The option to buy or sell annual leave
- Flexibility including hybrid working arrangements
- Increased pension contributions
- Wellbeing support through employee assistance programmes, enhanced sick pay, private health care and health purchase plans
- Support on commuting to work focussing on sustainability with season ticket loans, bike to work schemes, lift-sharing through work, electric vehicles
- Share options or employee ownership models
- Volunteering schemes
People want to have the option to select the benefits that work for them based on their current personal circumstances. This makes flexible benefits schemes very attractive to employees and moves away from a one size fits all approach.
However, to retain employees you need to do more than just offer a good reward package. Individuals are keen to develop and so defining your learning and development strategy as a company is crucial. Employees are more likely to stay with your business if they see you are interested in investing in them and there is a career path providing development opportunities. Where you can invest in your employees to upskill them this can increase employee satisfaction and loyalty. There should be ongoing discussions with all staff about training needs/wishes and career aspirations, bearing in mind that trajectories may vary from person to person and might (although not always) take a different course with life events and caring responsibilities.
It may be worth focussing on the retention of particular groups in your workforce. There has been an exodus of older workers in recent years, which can mean a loss of vital experience and knowledge. With an ageing population in the UK, employees are anticipating working for longer, and employers are increasingly looking to recruit and retain older staff to fill the skills gap. Ensure you include older workers in training and upskilling opportunities, including to avoid any inference of age discrimination. As older workers approach retirement they may be interested in different roles that require less time investment, but may nevertheless be very valuable given their experience in your workplace.
Women are another group that employers may want to focus on retaining. According to the UK’s Office for National Statistics, female employment is on the rise. It seems that hybrid working is allowing women to return and remain as employees more easily with caring responsibilities continuing to fall to more women than men. However, according to McKinsey’s recent Women in the Workplace report we are experiencing what commentators refer to as a ‘great break up’, a situation where female leaders are leaving their jobs at a remarkable rate. Simply put senior women are more willing than ever and move onto other opportunities if they are unhappy at work. So, an employer who wants to retain talent and a diverse workforce will take care to assess the push and pull factors of their environment for women. Clearly hybrid working is an attracting factor, but does your workplace have a culture that supports women? This might involve mentoring, proactively looking for opportunities, unconscious bias training.
Finally, ensure managers are making time to have good quality conversations with all of their team about their work, wellbeing and career aspirations. Research by Säid Business School, University of Oxford, shows that when employees are happy they are 13% more productive, that means for every 100 employees you would have the equivalent of 13 more people which is huge. Ensure managers are well equipped to have good conversations and are empowered to enable people to do their best work.
Next Steps
If you would like to discuss recruitment and retention, please get in touch. This article was written jointly by Laura McFadyen, partner at Stephens Scown and Samantha Mullins is a Director at Latitude HR, a People and Culture consultancy.