The rising cost of a poor people strategy

We find issues all along the recruitment-retention-development continuum. Each element is equally important for a rounded people strategy, but recruitment issues are perhaps the biggest concern.

Most organisations like to say that “our people are our most important asset” - and rightly so. No business can function without the right people, and this is especially true in a service context. For all the advances organisations are making to leverage technology and automation to improve the customer experience, it is staff who make the difference in terms of more complex service issues, added value, problem solving and empathy.

So it is a concern that our most recent piece of research finds that many organisations are struggling in one way or another with their people strategy.

Are You Connected? takes an in-depth look at recruiting, developing and retaining the skills for customer service excellence, and is based on research carried out amongst representative samples of managers, employees and customers.

The cost of unsuccessful recruitment

We find issues all along the recruitment-retention-development continuum. Each element is equally important for a rounded people strategy, but recruitment issues are perhaps the biggest concern. We found that 56% of managers believe recruitment has become more difficult because it is harder to find employees with the right skills and the job market has become more competitive. The result is that the average success rate in recruiting new staff is only 52%.

This level of unsuccessful recruitment has serious implications for organisations’ productivity, performance and employee engagement. In fact, we calculate that it has a staggering annual cost of £17.6 billion to UK businesses collectively.

Part of the challenge here is that in today’s market, organisations need staff with a higher magnitude of skills than ever before. Businesses need staff who have the right blend of communication skills, problem solving aptitude, initiative and commitment. Technology looks after more of the transactional elements, so people must be the differentiator.

Finding the right staff when everyone else is also competing for them is becoming more difficult. This only raises the stakes further to get it right.

Re-examining the recruitment process

Are there ways to improve the recruitment process therefore? We find that most organisations place the highest importance on face-to-face interviews and that most are using several channels including advertising, recruitment agencies and social media such as LinkedIn to attract applications. So it would seem that they are following sensible strategies, but are they still fit for purpose in the environment we are working in?

One interesting emerging trend is that 17% of businesses are involving customers in their recruitment. This could be in the shape of having a customer on a panel, observing a group exercise or even ‘interviewing’ a candidate one-to-one. I believe this is a trend that more businesses should explore. In addition, getting potential candidates to spend a day with the organisation as part of the process – although expensive – is a real and authentic way to help potential colleagues know what it is really like and for those in the organisation to have a sense of whether the potential recruit would be a good cultural fit.

Overall, however, our research shows that organisations are broadly following sound recruitment strategies - so where are things going wrong?

The retention challenge

I think we find a clue to the answer when we look at retention: our research shows that over half of managers believe their organisation is most at risk of losing employees in the first six months. The main reason for this tends to be because the job does not align to the employee’s expectations.

I believe that organisations need to place more emphasis during the recruitment process on setting out really clearly and openly what their expectations of the individual will be, and the skills, attitudes and values that they are looking for. They also need to inspire candidates by articulating strongly what the organisation’s purpose and vision is and how their role fits within this. Our research shows that employees are becoming more driven by the desire to work for businesses that they can really believe in.

At the same time, there’s no doubt that pay remains the number one criterion amongst most candidates when considering a new position. It has always been a hygiene factor. But after years of austerity in the UK and the squeeze that has brought on many households, I believe that pay has become more important.

On-boarding, training and development

Once an organisation has brought a new person in, the job does not stop there. In fact, it is only just beginning. The on-boarding process is critically important to give the individual the support they need to carry out their role. But our research suggests that all too often this process gets squeezed by the daily pressures on the organisation and individuals may have too much thrust upon them too early in the on-boarding process – this is not unusual and often difficult to avoid, but we must where possible prevent this becoming the default position .

Thinking through an appropriate training and development plan is also important. We can’t expect people to be brilliant unless we support and coach them. However, we find that there is a perceptible imbalance here, with 51% of managers having received five days in training and development in the past year compared to only 24% of employees. Are organisations doing enough to support staff at every level – and are line managers spending enough time coaching and mentoring the people in their team?

People strategy is a huge topic and I can’t do justice to every aspect in one blog. But the evidence is that most businesses have significant work to do. At the present time, with Brexit in front of us and uncertain territory ahead, it is more vital than ever to unlock the talent and potential of people.

Businesses are spending more and more on technology and digital solutions – but are they investing enough in the people that actually connect products and services with customers and bring the organisation’s proposition to life?

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Categories: Unemployment and skills Employee engagement Services