Deloitte research this month shows permanent job appointments have increased by an average of 20 per cent each month over the past year and skill shortages are at a seven-year high. Employees are returning to the job market to take advantage of good job availability, as an increasing number of career opportunities become available. Organisations are therefore under pressure to ensure they have the right recruitment and retention policies in place to deal with competitive times.
A seemingly easy way of achieving this is through a review of reward structures, however, there are many more means of ensuring top talent is retained. In a tough employment environment, it is arguable that when a retention strategy is developed on an urgent basis, as a means of stemming attrition rates, the problem is already critical.
Clearly, a competitive starting salary is still an important part of the retention strategy, but paying enough to bring good people into a business does not guarantee they will still be there one year later. Organisations need to reassess their retention structures on a regular basis, as well as ensure that staff have a full appreciation of the opportunities available to them, including those relating to career development.
A competitive edge can potentially be gained when an organisation allows its people to achieve their potential. Learning and development is a significant part of this but it is not about a ‘one-size-fits-all’ approach. For an organisation to become a true development organisation, it is necessary to have greater flexibility for people to determine their own futures – not a set path where boxes are ticked when training is delivered, but an individually-tailored programme.
A recent Institute of Employment Studies survey identified what it is that motivates graduates to stay with an organisation. Nearly all graduates (90 per cent) ranked training and development opportunities as the most important aspect of their career, followed by mentoring/coaching (83 per cent) and then career/salary progression (66 per cent). For managers, the statistics are more or less similar. Learning and development was one of the main areas that suffered in the downturn, and now that businesses are once again benefiting from improved conditions, it is vital that investment is made in this area.
Flexible benefits are another tool that organisations can still exploit. All staff are motivated by different things and a reward strategy that allows employees to customise their ‘rewards’ to meet individual needs and preferences is an excellent way of gaining long-term commitment. Flexible benefits also help organisations maximise employee appreciation of expenditure on benefits spend and total compensation, enabling staff to understand the wider aspects of reward.
Employers who still favour the ‘take it or leave it’ package, which allows no room for choice or change, will find they are left with large numbers of vacancies and an underperforming business.
By John Connolly, chief executive and senior partner, Deloitte