Employers have to develop the potential of their existing staff instead of
desperately recruiting new people in order to compete in the war for talent.
Research called People: The Phoney War? shows that high levels of
recruitment are having a limited impact on the profitability of companies.
While median profitability was up 6 per cent in 2000, the wealth created per
full-time employee had fallen by 30 per cent since 1999, according to the joint
research by SHL and EP-Saratoga.
Roger Austin, commercial director at SHL, claims that the skills shortage is
being exacerbated by firms hoarding staff.
He said, "Companies are snapping up all the available talent to get
ahead of their competitors, without having a role for them. The upshot is that
these employees will not be productive, will get bored and then leave.
"Recruiting employees is also more expensive, as you often pay a higher
salary for less experienced staff than the ones the company already employs.
Existing employees can then get dissatisfied and will also leave."
Line managers have to improve their people management skills to develop
existing staff, said Austin.
The report, released exclusively to Personnel Today, surveyed 1,250 European
companies across six different sectors, including retail and finance.