Executive summary& contents
Buying the market is no longer working.
Even though UK businesses remained optimistic as they entered Q1 2024, with 42% of surveyed organisations intending to hire, supporting a +27% net employment outlook, the hard facts remain unchanged: Despite a small drop in unemployment, the UK talent shortage is still overwhelming and 80% of employers cannot secure the talent they need – a 18 year high.
With record levels of staff turnover in many industries, and the average time to hire reaching a new peak of 44 days, organisations must come to grips with a harsh reality – trying to buy the market and relying on constant hiring to solve their talent problems is no longer working. A fresh approach is necessary; businesses must implement initiatives to develop the skills of their existing workers in a drive to increase staff retention and build their talent quotient from within.
Unfortunately, for many organisations, giving their employees access to training, creating career paths, and boosting job satisfaction – a critical element of staff retention – will not be as easy as it sounds. False perspectives, out-of-date mindsets and endemic barriers to progress may stunt the effects of many retention and employee development programmes.
Common problems include:
Businesses do not know what skills their workforce has, so do not know what they need
Organisations lack talent-mapping initiatives that can develop employee skills to match future skills demand
Middle managers do not have the time, training, resources or incentive to conduct meaningful career conversations with their team
Businesses tend to see their employee turnover as a transactional problem, when in fact, most employees quit for emotional reasons, not financial.
On top of these major issues, many organisations have been slow to react to the fact that the world of work has changed. Employees now hold the power and when they don’t get what they want from their employer, they vote with their feet. Poor work-life balance, few opportunities for promotion or to develop skills, lack of flexible working, compensation that does not keep up with inflation or the cost of living, and weak DEIB policies are just some of the issues that many workers face.
Stronger employee retention
Reduced recruitment costs
Higher job satisfaction per employee
Increased organisational ‘talent value’ – making the business more valuable
Better corporate EVP (employer value proposition)
Improved organisational ESG (Environmental, Social and Governance).
Moving forwards, the success of organisations will depend on their willingness and ability to create a culture of career ownership and mobility – a workplace that embraces the idea of career growth, where individuals are encouraged to grow their skill sets, there are no barriers to career progression, and talent development and internal mobility are baked into the deal.
The alternative is a continuation of the vicious cycle of hiring, losing, hiring and losing workers – a process that damages employee morale, hurts the bottom line and has a true cost that averages over £30k per worker. How many businesses can realistically afford that again and again?
Source: CIPD, 2023
In the face of a long-running talent shortage, organisations must look within to build the skills they need.
The Talent Solutions Ultimate Retention Guide is an analysis of current issues in the areas of employee recruitment and retention and a roadmap to steer organisations through their staffing problems. Use this guide to create a resilient, more productive and more satisfied workforce.
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Hiring, losing, hiring and losing workers again and again is an expensive...
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