Staff attrition is turbo-charging the UK’s current talent shortage. As fast as businesses hire new talent, they lose existing talent – it’s like forever filling a leaky bucket. Meanwhile, high competition for new talent and extended time to effectiveness for new hires is eating into productivity, accelerating recruitment costs and making businesses less competitive. But it doesn’t have to be like this. Companies can solve the UK talent shortage by retaining, retraining and making better use of the workers they already have – a case of fixing that leaky bucket.
Too many holes to plug
For many organisations, the cost and effort to hire new talent is becoming either prohibitively expensive or simply unsustainable. Worse still, in many cases, attrition is surpassing hiring, as the recruitment of new talent is failing to keep up with the departure of current personnel.
According to the Office For National Statistics current vacancies in the UK are running at 1.25million (with these likely to continue through 2023). Even looking back to the pre-Covid era, the UK had 823,000 open roles – driven perhaps by the fallout from Brexit as well as a general shortage of people due to other factors, (primarily an ageing population and not enough young people moving into technology roles). Now, even though vacancy numbers are starting to slowly fall, companies are still spending vast sums on recruiting new talent, and absorbing the additional costs associated with losing key staff members through attrition.
As well as cost, businesses must also tackle the time to effectiveness and the onboarding experience of new workers. Measuring these, and the costs in terms of management time, training, and lost business opportunities reveals an interlinked challenge: Recruitment of new talent should not stop at the offer stage. Strong onboarding is essential to engage new workers effectively. Likewise, retaining the experienced talent that organisations already have is vital to protect IP, team and business success.
It’s a situation that begs a fundamental question: Considering the competition, cost, and time it takes for businesses to hire new talent, compared to the benefits of retaining current staff, can UK companies afford to ignore the leaky bucket any longer?
Considering the competition, cost, and time it takes for businesses to hire new talent, compared to the benefits of retaining current staff, can UK companies afford to ignore the leaky bucket any longer?
As if the issues noted above were not bad enough, other factors are making life in the bucket even more turbulent. According to the World Economic Forum, up to 5 million jobs may be displaced by a shift in the division of labour between humans and machines, and 97 million new jobs are anticipated to emerge. These are encouraging statistics for workers, but for businesses, they present a new problem. Where will these millions of digitally-fluent workers come from?
In 2023, rising demand for digital talent is already increasing the costs of hiring at the same time as the lack of digitally-fluent workers is resulting in delayed projects and impacting companies as they fall behind their competitors. The Q4 2022 Manpower Employment Outlook Survey highlights that digital roles continue to drive job demand globally – IT businesses remain net positive at 42%, with Banking, Finance, Insurance and Real estate only 5% behind. All industries remain positive around growth in hiring despite ongoing cost inflation driven by the energy crisis sparked by the war in the Ukraine and a post pandemic hangover.
Meanwhile workers are signalling they want more training, with 39% of employees saying they’re concerned about not getting sufficient technology training from their employers to help keep their skills up to date.
Lastly, it’s not only the commercial world that is facing these challenges. As the UK civil service digital skills report, published 29th November 2022, highlighted – the need for digital skills is a major challenge in modernising Whitehall infrastructure, with 61% of government departments citing a lack of funding and 50% an inability to hire the qualified talent they need.
Fixing the leaky bucket
To overcome the myriad of talent problems, either via an RPO partner, or an internal Talent Team, businesses must consider the following questions.
- How do we meet the hiring needs of the business when resource scarcity is so high?
- How do we reduce the volumes of hiring we need to do to replace the people (and skills) we are losing?
- How do we attract the right people to join us and then keep them?
- How do we retain the people we don’t want to lose?
- How do we retrain and re-purpose the people we do have?
- How do we ensure the new talent we do hire in are effective quickly?
Co-designing a retraining and reskilling programme is increasingly the best option to meet the current skills gaps and as bonus it also addresses attrition. By creating a new career pathway for existing employees, businesses can bi-pass the need to recruit new talent and simultaneously build a culture of staying within a company for career development.
A great example of this is a recent project by British Telecom. Talent Acquisition Manager Rajvir Gill oversaw the recruitment aspect of a 30-person training programme for BT’s Cyber & Security business in November 2021:
“The point of this story is not just that 30 people moved from roles that were either becoming obsolete, or had no real career progression, but that the team were able to move 30 people into a role in BT that was in short supply, and to do it at the fraction of the cost of hiring in new people. We gave a new career pathway for existing BT employees who may well have left for a competitor or left the Telecoms industry completely.”
While our sister company Experis are focused on training IT talent (be that new hires or existing workforce), ManpowerGroup Talent Solutions RPO services plan the upskilling of retained employees across all skills sets and for all types of company. Fixing the leaky bucket means businesses don’t need to spend as much money trying to fill the talent shortage. This fulfils the needs of the business for vital skills, reduces recruitment costs and provides a fit for purpose workforce. Time to effectiveness also plays into this paradigm – by coaching hiring managers to look after their new hires we ensure that the new employee is more likely to stay and starts to contribute far more quickly to a business’ success.
ManpowerGroup Talent Solutions
Recruit, retrain, reskill, retain. Access the best talent for your organisation to maximise productivity and drive profitability despite an unpredictable, complex and evolving labour market. Contact ManpowerGroup Talent Solutions to find out more.