Attracting and retaining talent in a post-pandemic world
A Thinking Business publication.
In May 2022, the number of job vacancies in the UK was higher than the number of people out of work for the first time since records began.
Yet just as companies cry out for more workers, employees have been spurred on to change roles, sectors or even careers, in a trend that has become known as the Great Resignation. The result is a war for talent quite unlike anything that has gone before. Adding to this, around half a million people have completely disengaged from the labour market since the start of the pandemic. The upheaval caused by Covid over the last two years drove many employees to step back from work in favour of early retirement, more time with family, or taking sabbaticals.
“The Great Resignation is having a different impact in different sectors,” says Nicola Ihnatowicz, partner in the employment and pensions team at Trowers & Hamlins. “It means most employers are having to work harder and think more creatively about recruiting people, retaining people and planning for the future.”
A number of other macro themes are playing into the creation of a new world of work and shifting the relationship between workers and bosses. Today’s employees are more likely to look for flexibility, values and wellbeing when choosing a new job, and workplaces are now home to more generations – each with different priorities – than ever.
Danielle Ingham, partner in employment and pensions at Trowers, says: “With the increase in working from home and less face to face contact, the emotional connection between an employee and their employer may not be as strong as it once was, meaning people are more inclined to move jobs.
“What’s more, now that employees in certain roles or sectors can work from anywhere, many are moving away from big cities and are able to take jobs with employers based a long way from where they are living.”
In such a buoyant recruitment landscape, attracting and retaining talent is tough. At a recent Trowers & Hamlins event, clients were asked the reasons why they felt they were struggling to recruit. While salary and benefits were the number one challenge, skills shortages in their sector were a key factor for nearly six out of 10 respondents, followed by location and the need for specialist skills and qualifications.
“In some sectors it is just about a pay war,” says Ihnatowicz, “but we also act for charities and public sector organisations who just cannot keep adding zeros to the pay cheques. They need to stand out by making the most of their ability to offer flexible working arrangements and a positive culture, but that can be difficult to sell.”
One area of real employer innovation right now is in relation to benefits and incentives, where forward-thinking businesses are seeking to attract people by offering performance-related bonuses, often tied to the success of the company as a whole and rewarding with equity in the business.
Employers are looking at where they can scale up benefits packages in areas that give hard value, such as pensions contributions, and are also looking at offering more tailored benefit schemes that allow workers to spend their benefits entitlement how they like. A more individualised approach may not end up costing the company more but can let individuals decide whether they’d prefer more days off, help with childcare, healthcare or free gym membership.
Ihnatowicz says: “Non-financial benefits are a big focus at the moment, including increased holiday allowances and perks like half-day Fridays. We see companies offering benefits that include the opportunity to finish at lunchtime on Friday if they’ve met their weekly targets by then, monthly ‘no meeting’ days, shorter working hours in the summer and days off on their birthdays.
“What works will be different for every organisation, but there is a lot that can be done on the benefits side to help your business stand out.”
Offering genuine flexibility is increasingly critical to excelling in a crowded recruitment market, and that means letting people decide not just where but also when and how they work. “Many clients are telling us that if they have a fixed requirement for an employee to be in a certain place for a certain period of time, they just don’t get the same level of interest in that role” says Ingham. “Organisations who think performance is all about attendance are also behind the curve now. The expectation from employees is that roles that can be done flexibly should be done flexibly, and the vast majority of roles that were office-based are now hybrid.”
Employees also increasingly expect their employers to be willing to tailor their working arrangements to their individual needs, whether that means more days in the office one week than another, or flexing the work day around school pick-ups. “It’s not enough to just set up a hybrid working policy and stick to it rigidly,” says Ingham. “It’s about having an ongoing dialogue about what’s working and what isn’t, and what each person needs right now. Not all employers can offer everything, but it is important for the conversations to happen so that employees understand the limitations and feel seen and valued as individuals.”
The upside of such a dialogue is not just better connections and more engaged employees, but also the creation of a more inclusive and diverse working environment that can accommodate everyone.
There are undoubtedly challenges, especially where there are roles that cannot accommodate flexible working or where office staff and frontline workers in the same organisation are allowed to work in different ways.
“In those situations, again, it comes back to dialogue,” says Ingham. “People are more accepting of limitations and differences if they feel they have been consulted and listened to.”
She adds: “One challenge we are also seeing is around the split between junior members of the team and their more senior colleagues. The learning opportunity created by being in the office can be really important for those starting out in their careers, so balancing that face time with a hybrid or remote working policy can be tricky and does not affect everyone in the same way.”
With jobseekers increasingly focused on looking for roles with employers that share their ethics, companies can really stand out on the back of highly developed ESG policies that allow employees to feel proud of where they work.
“People now expect to join an employer that has the same values as them and speaks on some of the issues that they are passionate about,” says Ihnatowicz.
“Having an ESG strategy that addresses that, with measurable targets and regular reporting, and taking actions that match up to the words, has real business benefits.”
With more than enough jobs to go around, today’s employees have a choice about where they work and they are not afraid to exercise it, putting the onus on employers to step up with genuine commitments.