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3 actions employers can take to attract and retain talent

Employers need to place more value on data and recruitment models to inform a robust workforce strategy.

Employers all around the UK have found challenges recruiting for senior positions, attracting new candidates, and retaining talent. Those unfilled openings are affecting the productivity of existing staff who are asked to do more. They also play a role in inflation and future investment, recent reports show.

Resourcing and Talent Planning Report 2022 from the Chartered Institute of Personnel and Development (CIPD) found that recruiting for senior and skilled roles was most challenging, with 58% of companies struggling in this area, although 26% had difficulties attracting low-skilled candidates.

Retention is also more difficult. Sixty per cent of companies report that talent is more difficult to retain compared with a year ago, and 37% undertook initiatives to improve employee retention over the last year, up from 29% in 2021, the report said.

A report titled Overcoming Shortages: How to Create a Sustainable Labour Market from the Recruitment & Employment Confederation (REC) found that shortages have negative effects on productivity, inflation, and investment.

The REC's report found that any attempts to boost demand as a means to speed up recovery whilst there are labour shortages that cannot be filled will likely affect the economy negatively in the medium term, leading to higher earnings and inflation, and an overall fall in real disposable income.

Businesses have cited a tight labour market as affecting employee turnover, highlighting poor productivity after workers leave and the higher levels of training required to hire new workers, the report said.

"On average, 77% of firms report the limited availability of skills as a barrier to investment," according to The European Investment Bank Investment Survey cited in the REC's report.

Kate Shoesmith, deputy CEO of the REC, said that hiring intention among employers is still very high, but availability is a real issue.

"There are real recruitment challenges because the availability of candidates to fill those roles is still very low," Shoesmith said.

Interviews the REC conducted with businesses about their difficulties hiring chimed completely with the CIPD's findings, Shoesmith said.

Understand skills-gap challenges

The CIPD report said that 38% of organisations are increasing efforts to meet talent requirements by developing more talent in-house, with 60% upskilling employees.

Shoesmith said that companies first need to understand what progression looks like within their organisation and how these resources can be made available to employees. Second, it is important for employers to have comprehensive training programmes that work in parallel as part of their workforce planning strategy.

Research from the REC found that wider digital skills shortages among small- and medium-size entities (SMEs) are creating an £85 billion productivity gap in the UK.

The REC advises companies to get involved in local and sector skills coordination and increase investment in training and development for all staff.

There are obstacles, Shoesmith explained, mentioning companies that lack funding and do not receive the benefits of levy funds when it comes to providing training outside of apprenticeships.

"It's really important that companies know all of these factors about what their staffing profile looks like so that then they can have the best sense of what it is that they need to address and challenge within their own business," Shoesmith said.

Mirror employee values

The report from the CIPD said that pay and benefits is now most commonly ranked among the three most important elements of employer brand for attracting candidates, but 58% of organisations do not include pay and benefits among their top attractors.

Other factors such as perception of the organisation as an employer, career development opportunities, organisational values, perception of job security, and flexible working are also considered important, the report said.

Shoesmith explained that candidates' expectations have changed, and the candidates are very clearly driven to take roles within companies if they feel that the corporate values of that organisation align with their social values.

"Should a company say that they have one set of values but then demonstrate another that doesn't align with that individual, the individual will drop out of the recruitment process more quickly," Shoesmith said. "It's no good saying one thing and then not acting upon it."

Shoesmith said that that there are many themes that are important to candidates right now, mentioning climate change and diversity, and explained that candidates are particularly keen to see that an organisation has a diversity, equity, and inclusion (DEI) strategy.

The REC report encourages companies to recruit from diverse talent pools in order to address labour market imbalances and to have accommodating support services in place that are tailored to employee needs. The report said that it is also important to regularly review internal policies through DEI specialists and ensure they are up to date and in line with best practice.

Flexibility at work is for many employees now almost as important as pay if not more important, Shoesmith said

Test your technology

According to the CIPD report, 80% of companies report that their use of technology in the recruitment process has increased as a consequence of COVID-19.

Shoesmith said that technology can be useful to collect data and to inform companies on how to use that data well, referencing pay gap analysis tools, but it can also have unintended consequences, such as bias in recruiting.

Several of the businesses interviewed by the REC noted that they are becoming more reliant on recruiters to fill vacancies.

The CIPD found that fewer than 28% of companies make efforts to remove recruitment bias through testing the words of job adverts or checking that tests used are valid, reliable, and objective.

It is important that the company has an understanding of its recruiter's processes related to technology in identifying candidates, to ensure the recruiter is testing for unconscious bias, Shoesmith said.

— To comment on this article or to suggest an idea for another article, contact Steph Brown at Stephanie.Brown@aicpa-cima.com.