2021 saw historic numbers of employees quitting their jobs across the globe. In the United Kingdom, job vacancies reached a record high of 1.25 million between October and December 2021; more than half a million more vacancies when compared with the same period in 2020.
It’s likely that this number will keep rising. Afterall, we remain in the midst of a major psychological and cultural shift when it comes to how we view job roles and working environments, partly driven by the ongoing socio-economic impacts of the pandemic, as well as broader and more longstanding factors.
Even if your particular organisation seems un-impacted so far, it should still be a concern, especially as we also find ourselves in a period of ‘Great Re-Evaluation’; where workers may be strongly considering a job move – putting organisations in a potentially precarious situation if caught off-guard.
At LHH, we recently surveyed HR Directors, Heads of Learning & Development and full-time workers in the UK to understand more about how the current environment is impacting companies’ ability to retain and upskill existing talent. With hybrid working, furlough and permanent job losses frequently hitting the headlines over the past two years, staff retention has become one of the top concerns for more than half of businesses. Many organisations are now facing a growing skills gap as key talent exits the business. But why is this happening and what can be done to retain valuable employees?
Redeploy and Upskill to Avoid a Drain on Talent
Retention is a crucial factor in avoiding a major talent drain within any organisation. More than half of HRDs say that business leaders have expressed concern about staff retention; so much so that it has been identified as one of the top three biggest challenges.
The top five challenges facing businesses according to HRDs are:
- Clear D&I initiatives
- Competitive salaries
- Staff retention
- Improving benefits packages
- Company culture
In the face of these recruitment challenges, businesses could be missing out on the opportunity to upskill or redeploy existing talent. More than a third of L&D leads believe that there is too much focus on hiring new talent as opposed to retraining current employees – a sentiment shared by nearly half of HRDs.
Some organisations are already taking this step, with many HRDs claiming that they are primarily focused on retraining current employees in order to meet the skills gap. Most L&D leads are also actively training younger workers within their organisations to ensure no knowledge is lost due to an ageing workforce.
We find ourselves in a time where individuals are now ready to take charge of their careers. As such, upskilling employees need no longer be a top-down effort from the HR team, but instead businesses should be creating tools within the organisation for employees to self-serve the development of their career path. These tools should help individuals work towards both the jobs they aspire to and offer the learning pathways to close the skills and experience gaps required to get there.
In many cases, these efforts to upskill could also help businesses avoid having to make redundancies. In fact, more than half of HRDs say they are looking into retraining or redeployment as an alternative to redundancy wherever possible. Although many admit they are struggling to find the resources to do so, it’s worth bearing in mind that putting budget towards upskilling now could end up proving more economical in the long run.
Retrain existing workers
Retraining and redeployment can certainly improve staff retention. When we asked employees how their career had been impacted since the start of the pandemic, many said that their role has changed but that they have not received any additional training from their employer. Some also say they have taken on extra responsibilities without a promotion or any extra support.
Some workers have actually handed in their notice in the past 18 months due to being denied a training request, and others say this has caused them to seriously consider leaving their job. This shows a clear disconnect with the needs of businesses and the support being offered to employees. Companies know that retraining and redeploying workers is required to meet recruitment challenges, but employees are not getting the support they need to do this. Business leaders need to be working closely with L&D leads and HRDs to ensure they are properly retraining and redeploying employees with ample support.
Flexibility is a requirement, not a benefit
Expectations around flexible working have definitely changed, and new working practices may make workers consider avenues they previously thought not possible. Combine this with the fact that the job market is more stable and has become more favourable for job seekers again, and businesses should have retention as an issue front of mind.
In this period of resignation, reflection and re-evaluation, companies need to recognise the warning signs that great talent could soon be walking out the door and address demands before it’s too late. So, what are these warning signs?
According to our survey, some of the top reasons for an employee handing in their notice in the past 18 months include:
- Being denied flexible hours to accommodate last minute commitments (such as doctors’ appointments or childcare duties)
- Having to take time out due to burnout
- Being denied a holiday request with no legitimate reason
- Being contacted by colleagues out of hours
Perhaps unsurprisingly, a lack of flexibility from employers is a major irritation for employees. While all employers should strive to ensure there is a good work-life balance, the changes brought on by the pandemic have changed expectations – flexibility is now seen as a right as opposed to a ‘perk’.
While the pandemic created a lot of tough decisions and losses within many businesses, it also shone a light on how we recruit and retain – including why this should change for the better and benefit not only employers but the employee too. Now that this has been established, it is up to businesses to take the appropriate steps.
No business can out-run the pace of change and staff turnover is always inevitable. However, HR Directors, L&D leads and business leaders need to be in regular communication both with each other and with employees in order to nurture existing talent.
The companies that are best placed to retain talented staff are those that recognise that investment in human capital is just as important as other investments. To be successful, businesses must focus on developing a continuous learning culture, as well as supportive wellbeing offerings, and ensure that these practices are properly implemented, maintained and updated in order to support employees. As part of this, managers should schedule regular conversations with employees to identify how to continuously develop their people and decisively support their skills renewal and overall well-being.