• According to Vistage – the world’s largest executive coaching organisation for small and medium sized businesses – attracting and retaining talent is the single most significant challenge facing business leaders.

    In this article, Vistage member and Brachers Partner and Head of Employment and HR, Catherine Daw, explores the findings.

    It might sound obvious, but a major part of the success of any organisation hinges on the people within it. It’s all very well having a first-rate offering, but even a good business model with the wrong people is unlikely to reach its full potential.

    The need for business leaders to match the right talent to the right role applies at every tier of the company structure. A highly competent workforce is rudderless without strong leadership, a sense of direction and overarching strategy guiding it through the rough seas. In essence, it’s a marriage between having the right people in place, and how they are managed within the overarching strategy that is key to success, growth and ensuring longevity of an organisation.

    So, it’s not surprising that a Vistage survey of members showed that talent management was the single most significant leadership issue in their businesses. More than 60% of respondents felt that some aspect of talent management, including hiring, business culture and succession planning were the biggest issues, while 29% felt talent management was above all else the most significant issue.

    It’s well documented that demographic and economic changes in recent years have exacerbated business leaders’ concern about these issues. And it looks like there’s no end in sight anytime soon, with predictions that the problem could last for several years as 14 million UK employees retire and only half that amount enter the workforce. While the younger workforce is undoubtedly bringing new skills to the technological sector, this is offset by lack of life and business experience.

    Having said that, the future of your business is not a done deal and there are ways you increase the likelihood of attracting and retaining talent.

    Planning

    Too many companies approach talent management with a fire-fighting mindset, rather with an overarching strategy. Data shows that the demand for talent is increasingly beginning to exceed supply and recruiting the right people isn’t getting easier. In fact, 39% of people found it more difficult to hire qualified candidates, compared to a year ago.

    Economist Roger Martin-Fagg predicts business owners will have to offer new talent packages above the current market level to attract the right staff.

    Attracting

    Many business owners have already introduced measures to make their business a more attractive place to work, by increasing the salary offered as well as other benefits. Some managers think they’re 100% in the driving seat during the recruitment process but it’s key to recognise that a potential hire may also be looking at a range of options.

    Managers need to pitch their business to prospective employees, therefore they need to ask themselves if the proposition is an attractive one. For millennials in particular, career development is extremely important so a powerful drawcard is to offer career development potential.

    A solution to this could be to implement an employee referral programme. After all, your current workforce of highly skilled people is likely to know other highly skilled people.

    Recruiting

    The key issues in recruiting successfully are:

    • Talent must match between job description, person spec and CV
    • Passion is important but not sustainable. Being engaged emotionally with the job matters but it’s enough for people to just like it
    • Poor cultural fit sees many hires fail. It’s the glue that holds teams together

    Creating a company that people want to work for is really about creating a company culture focussed on building an open, honest, diverse and inclusive culture. While it sounds obvious, many organisations fail to tell people they are a great place to work. In a recent survey by Glassdoor, 77% of people would consider a company’s culture before applying for a job. These findings were backed by a survey by Indeed which found that the non-monetary factors which attracted people to a job were all based around company culture, including flexible hours, meaningfully work and the work environment.

    Retaining

    But the challenge doesn’t stop there. Once recruited, employers must retain and develop their staff. In a quest to find the best new talent there can be a danger in undervaluing your existing workforce. The re-hiring process is time-consuming and expensive and having an unfiled gap can greatly impact a business, and 26% of business owners said they had seen an increase in the challenge of staff retention compared to a year ago. Conversely, figures show that rewarding top performers correlates strongly with business growth,

    It’s integral for businesses to promote employee engagement within the organisation as research shows that an actively engaged employee is 300% more productive than a disengaged one. However, cultural factors such as staff engagement don’t have a monetary value so it can be challenging to incorporate them into any sort of company strategy.

    While strategies such as offering more money can anchor someone in a company it does not increase their productivity or engagement. To put this into perspective, offering someone a pay increase of 20% does not mean they will be 20% more productive. Furthermore, this can be problematic as innovation and creativity are low in companies with a high number of disengaged employees.

    Developing

    Offering training and development is said to have the biggest impact on the success of recruitment and retaining existing talent. Therefore, it makes sense for companies to focus of upskilling their employees. These findings are backed by Vistage’s ‘Future of Work’ research which shows that millennials want to better themselves through continuous learning. For employers to better understand this offering they need to realise that staff learning and development is not just about fixing weaknesses in the company and staff skillset, but an integral part of people’s growth and contribution.

    Studies show employees are more likely to stay at a company which has offered them the opportunity to develop their skills, over one which offers a higher salary. While it’s easy to think that staff will choose to leave a company once they have developed these skills, research indicates that there’s more of a risk that these employees will choose to leave an employer which doesn’t offer these opportunities in the first place. Some businesses have found that by creating an in-house skills academy has helped to mentor staff growth once they become highly skilled and retain them in the long-term.

    Key takeaways

    • Focus on talent management strategies which are most effective in your sector and business
    • Think before using pay or bonus as talent management tactics – these should be coupled with other methods
    • Raise your game on effective performance management, especially with underperformers
    • Identify key positions and people in the business and customise strategies for managing them.

    If you’re interested in reading more about talent management, look out for these articles in the coming weeks:

    • Interns: why hiring one could save your business
    • The importance of company culture in successful recruitment

    For advice on any matters relating to HR and employment, why not contact our specialist team.

    Can we help?

    Take a look at our Employment & HR page for useful information, resources, guidance, details of our team and how we may be able to help you

  • Key contact:

    Get in touch

    Please fill out the below form or alternatively you can call us on 01622 690691

    • By submitting an enquiry through 'get in touch' your data will only be used to contact you regarding your enquiry. Please view our website and cookie policy for more information