After a long period of stagnation, recent ONS statistics highlight that UK wages are growing at an annual rate of 3.8 per cent – faster than the rate of inflation. As such, inflation seems to have regained its position as the minimum benchmark for salary increases.
While undoubtedly great news for employees, these increased costs will have a ripple effect that could rock senior business leaders across the professional services industry. For mid-tier firms in particular, the pressure is on to review remuneration and reward packages and invent new ways to recruit and retain talent.
The tendency to hire ‘walk-in employees’, is a common problem in the UK. The uncertain economic climate has created a demand for candidates who can start a new role with little to no training, and larger businesses are willing to pay a premium to secure them. This trend is exacerbating the issue of wage growth and making the battle for talent harder for SMEs.
For businesses of all sizes, the recruitment problem is multi-faceted but ultimately stems from a shortage of highly skilled, versatile individuals. In large organisations, highly experienced candidates often have a large amount of bargaining power when it comes to negotiating their salary. In today’s fast-moving business environment, some workers may be highly skilled with industry experience accumulated over several years, but struggle to deal with the pace of technological change. Even if additional training is required in areas such as the use of new technologies, larger businesses can usually afford to make this investment to ensure they meet all aspects of the role requirements. On the other hand, SMEs and mid-tier firms may not be able to stretch as far financially and need to think outside of the box to prove that financial benefits aren’t the be-all and end-all for employees.
On a highly competitive playing field, a key starting point should be to create an exceptional ‘employer brand’, which accurately represents the culture of the business and its staff. In order to do this, it is essential to understand the business’ USPs. For example, it is important to question what the organisation stands for and what an individual in a new role can contribute to the business. In order to communicate these messages effectively, employers should engage with the existing team to find out what they love about working within the business. These insights can help to generate an authentic company story which can be conveyed through the firm’s communications channels, including its social media platforms and website.
The recruitment process is often the first opportunity for a business to make a positive impression on a potential new employee and is a clear indicator of the organisation’s core values; attracting top talent can hang on the success of the candidate’s experience. Whilst new streamlined technology and AI can help businesses to refine their processes and tailor their interactions with individuals, something as simple as ensuring points of contact are responsive and friendly can set an employer apart and leave candidates with a lasting impression.
As well as the need for SMEs to attract quality individuals, knowing how to effectively develop existing talent is also crucial. Having a dedicated HR team that is responsible for coordinating a formal training programme can be invaluable in this sense; any business relying on people’s skills to generate revenue needs to boost those skills in order to maximise profit. Ultimately, an employer who feels accountable for the direction and career progression of its employees is likely to receive more commitment from them in return.
Today, people tend to be focused on securing their next promotion and are often not prepared to wait for progression. As such, providing individuals with the necessary information and support to climb the ladder is key to keeping them aligned with the business. The attitude and skill of line managers to provide feedback, discuss development and show empathy is therefore vital. As motivational speaker and business consultant, Marcus Buckingham, famously said, “People leave managers, not companies.”
Ensuring that the recruitment process is flexible enough to take the personality and aspirations of a potential employee into consideration can help to ensure that they are a good fit. Rather than focusing on finding the ‘perfect candidate’, a ‘can-do’ attitude is often far more valuable when shaping a proactive and loyal workforce. With the right approach to training in place, the rest can be taught.
For SMEs, the loss of a star performer can have an emotional, as well as a commercial effect. Nonetheless, a positive attitude should extend throughout the duration of an employee’s time within the company. Maintaining relationships in this way, even recognising sometimes that a star employee’s needs can’t be met by the firm, creates ‘good leavers’ who remain assets for the business. Recently, the business world has seen a push towards more positive employment practices such as work-life balance. Options such as inclusion policies, mental health schemes, volunteering opportunities, CSR, flexible working, and more relaxed dress codes can all help to keep employees happy.
One of the key challenges SMEs face when competing with larger firms is ensuring that any wage increases are sustainable; inevitably, these costs need to be passed onto the client. The UK is also, however, battling a culture of ‘scope creep’, a gradual process that starts with small adjustments to a project but can end up causing delays or even overall project failure. To combat this trend, driving awareness of these tactics and ensuring that the team responsible knows the importance of sticking to a brief is essential. Supporting teams to develop ‘courageous integrity’ is important, e.g. having brave conversations about the value of what is being delivered in the face of price pressure. This goes hand in hand with building confidence and trust in working relationships.
The battle for talent within the professional services industry is tough, made tougher for mid-tier firms by recent wage growth. Whilst attractive on the surface, higher salaries don’t always mean better career progression, and may instead encourage a higher rate of staff turnover. By polishing up their recruitment processes and employer brand, SMEs can ensure that they stand out from the crowd and attract a skilled, adaptable and diverse workforce.