Talent: is it time for a rethink?

Businesses will need to take a creative and positive approach to the recruitment and retention of talent as people increasingly look for flexibility and purpose in employers.

The UK government is rightly proud of its track record on jobs. Since November 2011 the rate of unemployment has tumbled steadily. Back then it was 8.4%; but in the three months to July 2017 it hit a 42-year low of 4.3%.

In September, official data revealed 32.14 million people in work, 379,000 more than the previous year. The number of economically inactive people fell, while the overall employment rate of 75.3% was the highest since records began.

This is arguably the government’s crowning achievement, yet for employers, the ones ultimately responsible for reducing joblessness, it presents a significant challenge.

A tighter jobs market means extra competition for labour. People of all skill levels are in high demand and supply is starting to fall back. It’s a trend that was bedding in even before the referendum on EU membership and in certain sectors it is leading to major rethinks on talent.

Short supply of candidates

Keely Woodley, M&A Partner, Head of Human Capital and leading the Future of Work Inquiry says that the government has made several decisions that have tightened the pipeline of talent flowing into the workforce, particularly in healthcare. Examples include the NHS no longer relying on overseas doctors from 2025 and a fee of £1,000 for each worker hired from outside the UK.

‘We work with a lot of healthcare providers and education institutions who say we need a bigger pool of good candidates,’ she says.

‘At government level there is perhaps a lack of understanding about the importance of hiring skills from overseas and it is putting pressure on employers.’

Other factors are also influencing the situation. The relentless march of technological upgrades, for example, means education and training houses have to update qualifications and introduce new ones at a fast pace.

‘The UK has done well commercially in maintaining a strong global position, but we’re still short of the latest technological skills,’ says Benjamin Southworth, former Deputy CEO of Tech City UK and Founder of Unicorn Hunt, a jobs board for the tech community.

‘Universities are struggling to keep up with the constant shifts of technology, from the need for mobile app development to the more advanced artificial intelligence and machine learning. Ensuring we reskill an older workforce with basic digital skills is also essential.’

Woodley, who advises on mergers and acquisitions in the education sector, says money is currently pouring in from investors who can see the role it will play in the UK’s future.

‘The most successful businesses in the training sector are those offering digital transformation programmes and higher-level qualifications that are portable. Money is going into online learning and education technology at very high equity valuations,’ she says.

‘Providing training for people entering the workforce, as well as for those already there, will help close the skills gap at the medium-to-high level, the type of jobs that really drive an economy forward. The government has a role to play in making this more immediately attractive to employers, perhaps through the tax system, but bosses must also recognise that “upskilling” is in their interest,’ she says.

According to the CIPD’s Learning and Development Survey 2015, the median annual budget per employee was £201-£250 in the UK, with 27% of organisations spending less than £100. The CIPD ranks the UK fourth from bottom in the EU league table for job-related adult learning.

Meanwhile, CIPD research published in 2012 placed England and Northern Ireland in the bottom four industrialised economies for literacy and numeracy among 16 to 24 year-olds, and last in computer problem-solving in 19 countries for the same age group.

> Read more about our inquiry into the Future of work 

Research report
Planning for growth: Don't let uncertainty hold your business back Discover the barriers and accelerators to private sector growth
Future of work Our inquiry into the future of work - and building environments where everyone can thrive. Find out more

CEO insights: tailored content for CEOs and business owners

Receive the latest insights to stay on top of the issues that matter to you. Let us help you set the agenda for the year ahead.

Increased focus on CPD

‘Organisations must make learning and development a priority, not just an add-on. Not only will an increased focus on professional development help to create a more skilled and effective workforce, it actually entices existing talent to stay,’ says Woodley.

But all is not lost: far from it. Almost 90% of UK companies provide training to their employees, which is the highest percentage in Europe, says Eurostat, and Brexit has caused companies to revisit the way they recruit and retain staff.

Competition for top talent is fierce and companies are coming up with innovative ways to attract the people they need to keep moving forwards. Top candidates know this and are increasingly choosy about where they work.

‘Employers need to ensure they are marketing to future employees and ensuring they are controlling their staff retention,’ says Liam Murray, Client Services Director at BPS World, a talent management company.

‘It’s about having your brand represented well in the market, controlling your online reputation, ensuring your recruitment process is both effective and a positive candidate experience, and putting greater emphasis on onboarding and induction.’

Positive thinking

Benjamin Southworth at Unicorn Hunt says younger employees, in particular, increasingly look for companies that mirror their own values with a good atmosphere and a positive philosophy, as well as a strong work-life balance.

Gethin Nadin, Director of Global Partnerships at employee benefits consultant Benefex, agrees. ‘The lines between work and home life are blurred,’ he says. ‘Employees are becoming “consumers of the workplace”, so employers must offer more than just a job. But this doesn’t necessarily need to be anything hugely expensive or material.

‘The current trend is that time is a valuable commodity. People want flexibility as much as high salaries or benefits.’

To stay ahead, Grant Thornton’s Woodley recommends businesses monitor other organisations in their sector and try to do it better. Recruiters should be flexible, open-minded and treat interviews like two-way conversations, respecting the needs of each candidate.

‘Loyalty tends to be bred from non-money factors such as status, responsibility and environment,’ she says. ‘Looking at your recruitment and retention policies from a holistic perspective will help to create an engaged workforce, which is what builds sustainable, successful businesses.’

Five tips for attracting and retaining talent - what makes the difference?

1 Market to future employees. The tight jobs market means you have to make an early impression.

2 Ensure your organisation reflects the values younger people want to see.

3 Focus on flexibility and work-life balance – they are increasingly as important as a good salary.

4 Treat interviews as a two-way conversation – it needs to be the right fit for both parties.

5 Retain and develop existing staff – make learning and development a priority.

To have a conversation about talent, or to find out more please contact Keely Woodley.

Words: Nicole Green