Standing out as an employer of choice will help you attract talent, and retain them. If your people feel aligned to your culture and share your values they'll want to work for you. Ultimately saving you money by minimising costs arising from high rates of employee attrition and reducing spend in other areas of your employee value proposition (EVP). It's a simple strategy, but executing it can be daunting.
The responses we're receiving to our Business Outlook Tracker, as well as feedback from clients, show that economic and political uncertainties are putting pressures on budgets, especially around investment in culture. We're still seeing investment, but with a much stronger focus on ROI.
More than half of respondents to the tracker are struggling to replace leavers and recruit to support growth, with nearly 60% reporting continuing high rates of attrition. This is directly increasing their costs. Two thirds report having to offer more money to attract new joiners, or give pay rises and/or bonuses to retain people.
Another constant theme is the ongoing challenge for organisations to ensure they have the right skills. Even with pressure on budgets, just under 80% of businesses surveyed say they're either increasing or maintaining their investment in training. The most common target areas being targeted are digital, finance, and leadership.
Attracting, retaining, and developing talent while managing costs, and ensuring the spend is targeted to maximise value, are likely to remain key competing pressures for businesses going into 2024.
To help you understand how to deliver this ROI across their EVPs our latest People Agenda Forum asked the panel to share their insight and guidance on maximising value from your spend.
Culture is a critical factor for many people deciding to join or stay with your organisation. Leaders will say often they know that getting their culture right is good for their business, but struggle with measuring the ROI to justify investment in it. You need to have the right data on your employee lifecycle and analyse it so you can see how investing in your culture can improve performance and reduce attrition.
"Where we're seeing employers do this well is where they've really got a handle on identifying the monetary value you can add to improving the employee experience."
Katie Nightingale, Business consulting
There are two clear areas where you can invest in your culture to attract, engage, and retain your employees: employee benefits and skills development.
Your people are more likely to look for other work if they don't feel their needs are being met. Employee turnover incurs costs for businesses and high attrition can have a negative impact on the people who stay. Investment in benefits can cut these costs. It's vital, though, that your benefits are relevant and targeted effectively to achieve your aims.
"You need to ask 'what's the culture of your organisation' and how can you reward people in line with it."
Katy Bond, Employer solutions
Even if your benefits structure is quite complicated, it's important to make it easy to navigate, and give your people enough time to make selections.
How you present these benefits also matters. People engage more with messages that come from their own manager or senior leaders. Examples of leaders sharing their own experience of using benefits can make the value of them seem really tangible. Crucially, it can demonstrate that your benefits, such as employee assistance programmes (EAPs) or virtual GP services, are there to be used whenever people need them – not just in a crisis.
You should also think about the language you use. People engage more with 'retirement savings' than pensions. Even giving a name to your benefits package will demonstrate that it's more than a collection of individual schemes. It's a complete offering that you've really thought about.
"If people don't value what's on offer to them they can feel they're paid less than their colleagues, who are getting something that they value."
Laurie Eggleston, Employee benefits
Offering training that helps people improve their performance and become eligible for progression is also a strong incentive for people to stay with you. To ensure you're getting value from this investment you need to be clear about the skills gaps you want to fill, and the options available to do it.
Only 4% of employers have fully utilised all of their Apprenticeship Levy funds, with more than £3 billion going back to the Treasury since 2019.
"It's great to work with clients who know their training budgets are being squeezed and see them having that 'light bulb moment' when they realise that pot of funding is available. You can be quite creative in how you use it to get most value for money."
Adil Hafidi, Talent solutions
Consider working with providers to tailor apprenticeships to your broader people agenda, for example, accelerated programmes for women in leadership.
There are around 600 apprenticeships out there so it's highly likely that there will be one aligned to your specific skills gap. Back-office functions, leadership, and sustainability, as well as data, digital, and AI are all priorities for most organisations.
You can also use apprenticeships to shape the culture you want. For example, many businesses are looking to immerse more of a coaching culture and apprenticeships are a great way to do that.
Flexibility is about more than 'you can work here or here', it's about the entire pattern of how people manage their schedules. Are you giving people the flexibility they need to do their best work? That's key to creating a truly diverse and inclusive culture. To really get value from it you need to invest in the digital tools to give people the sense of connection and belonging that ties them to a company. And ensure that your people managers have the skills to lead teams remotely – not just on output, but wellbeing and development.
The key priority shared by everyone on the panel was communication. You need to communicate with your employees to understand the benefits, working patterns, and training that they want. And you need to tell them about what you are offering them. You could have a market-leading benefits package, but if your people don't know about it then you're wasting your money. This is true of everything you offer your employees. Communications are most effective when they're well-planned, regular, and cognisant of how they're going to land in your organisation.
