Simply having the biggest carrot on offer will not attract the best
candidates, says Andy Batt
The ever-uncertain economic climate means that for many organisations,
concerns about skills shortages and employee turnover have been superseded in
the short-term by questions of how to manage costs and raise productivity.
But the longer-term agenda remains. Creating a well-managed, effective
workforce, able to deliver its best for the future, cannot and should not be
left to chance.
Employers will need to be smarter about managing all their employee ‘talent’
effectively – not just the high-fliers they may have focused on in the past.
The problems caused by a mismatch of need and available resources in the
labour markets are all too familiar. The IT industry has illustrated this
difficulty, with repeated periods of high salary inflation and employee
turnover. In the UK and Germany, governments have taken radical steps to deal
with such shortfalls, offering easily obtainable work permits to thousands of
skilled IT staff from outside the EU. These are the wanted ‘economic’ migrants.
Population growth trends indicate that in the absence of other changes – for
example, substantial increases in immigration or relocation of jobs to other
markets – skills gaps could become widespread throughout Europe.
How employers can prepare
Employers need to market themselves to existing and future employees with as
much vigour as they do their products and services. The most successful
organisations will have already addressed many of the following:
– Develop a distinct employer brand
Organisations with a clearly defined employment brand proposition and
positive image find it easier to attract new staff. Those who have not invested
in building their reputation will naturally find it harder to recruit, and may
end up paying a premium to persuade employees to join them.
Think about ways in which you can differentiate your employment offer from
the rest. Benchmark yourself against organisations rated as the best to work
for in your markets.
– Expand the ‘marketplace’ you recruit from
Every employer strives to hire the best possible people. Yet in a tight
market, a compromise may need to be reached between ‘the ideal’, and what is
available at a reasonable cost. Review your hiring policies to ensure they are
not unnecessarily restrictive. This might include:
– Understanding age limitations – A simple way of increasing the supply of
skilled workers is to keep existing employees in the workforce for longer.
People in their 50s have considerable experience and wisdom, and may well be
more loyal than someone in their 20s. There are well known executives beyond
normal retirement age who are energetically running successful businesses –
such as Warren Buffet and Rupert Murdoch.
The EU has set goals for countries to extend the average retirement age. A
number of retail organisations, notably B&Q in the UK, have already taken
steps to encourage older employees to remain or rejoin the workforce.
Increasing your own organisation’s effective retirement age can have
implications for pension provision, such as increased benefits payable for a
shorter period and the financial consequences of this need due care and
attention. The Nationwide Building Society in the UK has revamped its pension
scheme to remove disincentives to employees delaying retirement or working
reduced hours at the end of their career.
– Encourage female employees – Along with older workers, the EU is committed
to increasing the number of women in the workforce. Family-friendly policies
such as part-time working, term-time working, home working, parental leave and
childcare support all play a role in achieving this aim. While most
organisations now have family-friendly policies in place, the culture does not
always lend itself to people taking them up without guilt. A positive
management attitude to this is essential.
– Appreciate the difference between competence and knowledge – It is all too
easy to seek specific past experience or qualifications when looking for a new
recruit. Yet many studies have demonstrated that the way people work is the
strongest indicator of future performance. For many roles, specialist technical
knowledge can be learned far more easily than behavioural changes.
– Learn about unfamiliar qualifications – When recruiting staff from another
country, it is important to understand some of the differences in their local
education system. A German graduate may well have only just started their
working career at the age of 30, while a UK graduate could well have eight
years work experience by then.
– Understand internal customers
Any external marketing expert recognises that the better you know your
customers, the easier it is to understand their needs. Make sure the same
applies to your organisation internally. Line managers should regularly talk to
their teams about how they feel about their working environment, and act on
their feedback. Encourage ‘open door’ policies where employees have the
opportunity to speak freely. Conduct regular employee attitude surveys – with
web-based surveys this is not an onerous process. The use of a short,
consistent questionnaire enables trends to be tracked over time without
overloading employees. Gathering data from leavers about why they left, or from
new recruits about their experience of your hiring process, will create an
accurate picture of your company culture.
– Improve the ‘product’ you offer
Once you understand what people want, or what other organisations do well,
the next step is to take advantage of the opportunities identified. Some
positive steps are:
– Consider how you could be more flexible about when, how and where staff
work. With modern telecoms technology many employees can and increasingly are
keen to operate from home, at least some of the time.
– Consider segmenting your offer to appeal to different employee groups. For
example, an internationally mobile employee might not value membership of a
local pension plan with lengthy vesting provisions, but they may value tax
planning advice. Another example is providing flexibility for employees to
change the construction of their package as their personal circumstances change
during their career.
– Tailor your offering by market
For organisations operating in multiple markets, there are clear practical
advantages to having common policies and systems. It enables communication and
HR systems development to be shared. However, it is equally important to be
aware of the different regulatory and tax regimes, employee expectations and
market norms. Offering stock option programmes on exactly the same terms in
Benelux, France and the UK would create big differences in income tax and
employers’ social security liabilities in each country. With some tailoring,
these programmes could be delivered far more efficiently.
– Communicate your offering effectively (and often)
It is no use having a great proposition if you do not communicate it to
current and prospective employees. Simple tools such as total compensation
statements can be powerful in ensuring employees understand and appreciate the
value of their current total package. Equally, where employees need to make
choices about package elements, flexible benefit programmes can significantly
Web-based communications provide a simple way for employees to look things
up or to disseminate information. This can also have the added benefit of
removing transactional workload from HR teams.
For prospective employees and new recruits, a set of well-packaged materials
about the organisation and the total employment offer presents a slick
professional image, and is more likely to be read and appreciated.
Retain existing customers
Many of the actions above will improve the overall employment offer and help
retain staff. Hay Group research on what drives a genuinely ‘engaged
performance’ from an employee frequently shows that the extent to which they
perceive opportunities for personal development and growth is a key factor in
deciding whether to stay or leave an organisation.
Allowing unpaid career breaks, job rotations, secondments and support for
personal study such as language courses, MBAs and so on can all contribute to
increasing the loyalty and commitment of employees. Encouraging employees to
take responsibility for their own development can also be seen as positive.
Combined with e-learning tools, this can be an efficient method of enhancing
the skills and satisfaction of your workforce.
Handling severance well should not be overlooked. As well as focusing on
making the working environment and employment offer attractive for current and
new employees, ensure leavers and unsuccessful applicants are treated
reasonably – you never know when you might need them or one of their ‘network’
in the future.
Train your salesforce
Managers who interview potential employees are the public face of the
organisation. This also applies to external recruiters. Training and
communication is important, not just to deliver a high-quality hiring process,
but also to ensure a consistent, truthful and positive message about your
organisation is presented to prospective employees. As outsourcing of HR
activities grows, it is critical the quality of suppliers is monitored.
Despite current unemployment variations across Europe, the most likely
long-term trend will be a shortage of skilled employees. Employers who are
proactive in understanding the implications of this, and start identifying
practical solutions that continue to meet both the business and the reputation
objectives are likelier to recruit and retain more talented people than those
who ignore the longer-term trend.
Andy Batt is a consultant for Hay Group, a people management consultancy