Money isn’t enough for businesses to keep talent, say experts

Although more firms are increasing pay in order to retain their talent, they are being warned that this isn’t enough when it comes to tackling ongoing skills shortages.

The latest research from the CIPD and Omni shows that offering flexible working, for example, has proven successful for many businesses when it comes to attracting and retaining more talent.

According to the survey findings, 30% of employers who had recruited in the last 12 months say that advertising roles as ‘open to flexible working’ is amongst their most effective recruitment methods.

As many as 49% of organisations say that their use of hybrid/remote working has ‘greatly or somewhat’ increased, with almost a quarter expecting this to increase further over the next 12 months.

Claire McCartney, senior resourcing and inclusion adviser for the CIPD, commented, “Businesses are facing some of the most challenging times imaginable in the coming year, with a cost-of-living crisis and potential recession. It is now more important than ever to be proactive with workforce planning and to develop compelling offerings to attract and retain a diverse group of employees. Employers won’t be able to afford continued pay increases, but they have an array of other options available to them to continue attracting and retaining staff.

“The pandemic showed the positive impact flexible working can have for both employees and organisations and our research continues to show that candidates increasingly look for flexible working during their job hunt. Greater availability of flexible working is usually a low-cost option for employers looking to improve their benefits package, and businesses can also reap the rewards through improved job satisfaction, loyalty and business flexibility.

“Employers shouldn’t simply focus on pay but look to advertise roles as flexible and offer options for hybrid and remote working, where possible, to strengthen their attraction and retention offering.”

Louise Shaw, Managing Director, Omni RMS, added, “Unrealistic salary inflation is not only unsustainable for employers, but will also have limited success long term, with retention rates likely to drop as financially-driven individuals jump ship to gain further pay increases.

“Candidates want more than just good pay and are seeking meaningful jobs that are culturally and personally rewarding. Less forward-thinking organisations find themselves at the mercy of a labour market, the likes of which we haven’t seen before, with competition for skills creating retention pressures that recruitment cannot contend with. The resulting fight for talent is costly and not sustainable, hence organisations need to accelerate their plans towards ‘resourcing maturity’. Businesses that fail to think strategically run the risk of losing out in the competition for talent.”

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