After much stagnation, recent ONS statistics show that UK wages are growing at an annual rate of 3.8 per cent, which is faster than the rate of inflation. Therefore, inflation has taken back the throne as the minimum benchmark for salary increases.
Whilst obviously brilliant news for employees, this rise in costs will have a knock-on effect that could impact senior business leaders across the professional services industry. Particularly, for mid-tier firms, there is pressure to invent new ways to retain and recruit talent and review reward packages and remuneration.
A common problem in the UK is the tendency to hire ‘walk-in employees’. Due to the uncertain economic climate, a demand for candidates that can start a new role with hardly any training has been created. Large businesses are willing to pay a premium to secure them. This pattern is worsening wage growth and making the battle for talent much tougher.
A shortage of highly skilled workers
For all sizes of businesses, the recruitment problem is complex but overall comes from a shortage of highly skilled, versatile individuals. In larger organisations, experienced candidates usually have a larger amount of bargaining power when it comes to discussing their salary. In the fast-moving business environment of today, some workers might struggle to deal with the intensity of technological change, even so they have industry experience and are highly skilled. Larger businesses can usually afford to make this investment to make sure they meet all parts of the role requirements even when additional training is needed in areas like the use of new technologies. However, SMEs and mid-tier firms might not be able to reach as far financially and so they need to think outside the box to show that financial benefits aren’t the only thing that matters for employees.
In a highly competitive environment, an important starting point should be to create an impeccable ‘employer brand’, which precisely embodies the culture of the business and its staff. To achieve this, its paramount to comprehend the business’ unique selling points. For instance, questioning what an individual in a new role can bring to the table and what the business stands for is key. Employers should engage with the current team to discover what they love about working within the business, to communicate these messages successfully. An authentic company story can be generated from these insights, and conveyed through the firm’s communications channels, including its website and social media platforms.
The power of your recruitment process
The best opportunity to make a good first impression on a potential new employee is the recruitment process. A clear indication of the organisations core values ; attracting top talent can hang on the success of the candidate’s experience. To leave candidates with a lasting impression, something as simple as ensuring points of contact are friendly and responsive, along with AI and new streamlined technology which helps businesses refine their process and tailor their interactions with individuals, can set an employer apart.
It’s crucial that SME’s know how to properly develop existing talent, as well as attracting quality individuals. A dedicated HR team responsible for organising formal training programmes can be priceless; any business depending on people’s skills to bring in revenue needs to improve those skills to maximise profit. An employer who feels responsible for the career progression and direction of its employees is likely to receive more commitment from them in return.
Nowadays, people seem to be more concerned on securing a promotion and are often not prepared to wait for progression. Therefore, providing individuals with the information and support to work one’s way up is key to keeping them united with the business. The skill and attitude of line managers to show empathy, discuss development and provide feedback is consequently vital. As business consultant and motivational speaker, Marcus Buckingham, famously said, “People leave managers, not companies.”
Making sure that the recruitment process is flexible enough to take the aspirations and personality of a potential employee into thought can help to ensure they are a great fit for the company. A ‘can-do’ attitude is often more valuable when shaping a loyal and proactive workforce rather than focusing on finding the ‘perfect candidate’. With the right approach to training in place, the rest can be taught.
The loss of a great employee can have an emotional and commercial effect on an SME. Even so, a positive attitude should stem throughout the duration of an employee’s time within the company. Keeping relationships in this manner, even appreciating that a star employee’s needs can’t be met by the firm, creates ‘good leavers’ who remain assets for the business. In recent times, the business world has seen a movement towards more positive employment practices like work-life balance. Options such as volunteering opportunities, flexible working, inclusion policies, mental health schemes, CSR and more relaxed dress codes can all help to keep employees happy.
Fighting back against ‘Scope Creep’
When competing with larger firms, a key challenge that SMEs face is ensuring that wage increases are sustainable. Inevitably, these costs must be passed onto the client. The UK is fighting a culture of ‘scope creep’, a gradual process that begins with minor adjustments to a project but can cause delays or overall project failure. To battle this trend, its essential to drive awareness of these tactics and make sure that the team responsible knows the importance of sticking to a brief.
Supporting teams to grow ‘courageous integrity’ is significant, e.g. having uncomfortable conversations about the value of what is being delivered in the face of price pressure. This goes alongside with building trust and confidence in working relationships.
The fight for talent within the professional services industry is hard-hitting, though tougher for mid-tier firms due to new wage growth. Whilst attractive at first, higher salaries don’t intern mean better career progression and might actually lead to a higher rate of staff turnover. By refining their employer brand and recruitment processes, SMEs can guarantee that they stand out from the crowd and attract a adaptable, diverse and skilled workforce.