Employers facing the largest skill shortage in 17 years must review their retention and recruitment strategy to compete for top talent.
Two factors influencing the current job market make it harder for employers to retain and attract talented employees. First, employee confidence about their job and promotion prospects is high (43%) creating a greater flight risk. Second, skills shortages have doubled since the UK exited the European Union with four in five firms struggling to fill roles. Together these mean employers will have to work harder to retain and attract talent.
Benefits of employee retention
Yes, a good retention strategy will save an organisation a significant amount of money on recruitment and training costs, but it also increases staff loyalty, motivation and ultimately productivity as well.
How to attract top talent
More than half (58%) of UK employers say they are boosting pay and reward. While inflation remains high, there is only so far, a responsible employer can compete on pay.
A well thought through employee benefits package provides employers with a tax efficient way to boost an employee’s overall reward package while helping to support needs created by the current cost of living crisis.
Employee benefits to support recruitment and attention
In the current economic climate, a competitive employee benefit offer might include the following elements:
- Salary sacrifice benefits – which give employees access to electric cars, tech, cycle-to-work schemes, gym membership with a manageable payment profile and savings on tax. Employers save money on these schemes too.
- Employee discount schemes – these provide money off for everyday purchases and big-ticket items, helping employees stretch their pay packet further or make treats, gifts, and experiences more affordable.
- Support with food costs – either through pre-paid cards, gift cards or e-vouchers, whether that is for a one-off or monthly payment.
- Interest-free loans – to cover university costs, rent, train travel, house moved or unexpected emergencies.
- Wellbeing benefits – health insurance or cash plans which give employees and their families access to timely medical care.
One increasingly common focus for employers is to ensure choice and parity of access to benefits across all pay grades. Whether that is health insurance or car salary sacrifice for an electric vehicle, we’ve seen a high take-up of these benefits from employers who have adopted this approach.
Finally, if you are one of the majority of employers who don’t offer a financial wellbeing programme – a benefit which helps employees better plan and take charge of their personal finance – now is the time to consider investing in one as part of the support you provide for the year ahead.
A competitive remunerative package alone won’t attract staff if an employer has a poor reputation for the way it treats employees and it certainly won’t be sufficient to retain existing employees. For this reason, an effective employee retention strategy should also focus on employee experience.
How to retain employees
The principles for creating a positive employee experience haven’t changed. Employees want to feel well managed, and that their efforts are recognised and appreciated by their boss.
What has changed is the mass adoption of hybrid and flexible ways of working. Many of the touchpoints employers previously focused on to create a great employee experience have fundamentally changed. Employers can no longer assume employees will be working together in person in the same place. And that means they need to rethink employee experience in the context of hybrid working.
How to create a great employee experience for a hybrid workforce
While there’s no right way to evolve a hybrid organisation, incorporating five design principles will help ensure new ways of working can deliver business performance while creating a competitive employee experience.
- Cultural change
The first is to develop a shared mindset across the organisation that cultural change is key to effective hybrid working.
Lockdown showed that having the right technology and kit enabled staff to work from home but didn’t make up for impaired collaboration, relationships or wellbeing or disruption to work processes. Cultural change can only be effective if the people, IT and property elements are truly integrated.
- Adapting communications for hybrid-working
Second, communications need to be framed in this context. To work effectively, hybrid working requires a change of mindset for leaders and workers around performance management, collaboration within and across teams, and staff wellbeing.
It also requires careful management of expectations otherwise mismatched expectations around workplace presence, balancing the flexibility staff want with business priorities and managing staff wellbeing and performance, can create discontent.
- Team specific solutions
Tailoring solutions to different teams is a third imperative. One size fits all solutions won’t be effective because every team works differently, shaped by business needs and how they interact with other teams and clients. Getting hybrid working “right” requires input from all stakeholders to tackle what is a multi-faceted challenge.
A fourth necessity is working with each team, including team members, managers and clients to map out what they need to work effectively. Here the critical task is to balance the needs of the business, good working relationships, collaboration and the behaviours that drive effective ways of working, as well as location and technology. Staff are more likely to support a solution they have co-created, that as a result makes sense to them.
- Provide training for managers
Finally, invest in reskilling managers to support and engage teams in dispersed locations. Working from home can be isolating for individuals and hard for managers to spot any dips in morale.
Employers need to build the knowledge, skills and behaviours that managers need to help their people thrive in a hybrid environment – support their wellbeing, build a community, manage performance, team dynamics, onboard new joiners, communication. And create ways to enable managers to share best practice across the organisation as well as learning from what doesn’t work.
Related to this point, organisations need to help staff take responsibility for developing their personal effectiveness in a hybrid environment. Facilitated team sessions are an effective way to encourage staff to think about the knowledge skills and behaviours they need to contribute as an effective team. Focus on the psychological aspects of being part of a community and staying connected while working in different locations.
With a solid foundation in place, you can start to consider how to finesse employee experience to address other talent shortages that currently impact business growth – women with childcare responsibilities and over 50’s to unretire. Or to experiment with new ways of working such as a four-day week.