Attracting and retaining top talent is key to success in economic downturn

In the current financial climate, the attraction and retention of skilled employees is regarded as the pivotal source of competitive advantage for businesses, new research has suggested.

A poll of nearly 200 senior executives of UK firms, conducted by business services firm KPMG, found that 83% of respondents said human capital was the key to maintaining an edge over competitors.

Three-quarters of companies in the survey said the UK fell short in terms of skills, particularly literacy and numeracy. And two-thirds of respondents said the current skills shortage was damaging the success and effectiveness of their business. Only 3% said the skills shortage had not had a negative impact on their business.

Recruitment issues faced by organisations included:

• finding people with the skills to provide good 'customer service' (73%)
• the 'cost of employment' (69%)
• 'increased flexibility of the workforce' (62%).

Ronnie McCombe, head of people services at KPMG said employers were becoming increasingly aware that skilled employees have a crucial role to play in the performance of a business.

"It is very frustrating for those businesses who spend time and money to train staff only to lose them not long after. In the past few years, we have seen a number of companies, looking to adopt a more strategic approach to these challenges, implementing a reward strategy designed to make a clear and tangible difference to the business bottom line," McCombe said.