Organisations are experiencing both escalating skills shortages and increased competition for talent, with 3 in 4 organisations (78%) reporting recruitment difficulties in the last year, according to the latest CIPD/Hays Resourcing and Talent Planning Survey. The survey, launched today at the CIPD’s annual HR Software Show and Recruitment exhibition, shows that many organisations are having to look externally to meet the changing skills needed in-house. However, the CIPD is warning that equal attention needs to be given to the development of internal staff, in order to build a skilled and sustainable workforce in the long-term.
The survey of 520 UK-based HR professionals, which examines resourcing and talent planning strategies across private, public and voluntary sector organisations, found that while nearly half (45%) of respondents are making efforts to develop more talent in-house, almost three-quarters (74%) continue to recruit externally for key talent/niche areas. In fact, 44% of organisations anticipate an increase in headcount in 2015.
Managers, specialists and technical staff are proving to be the most difficult vacancies to fill, followed by senior managers / directors. The most common reasons for recruitment difficulties varied by role, but a lack of specialist skills and industry or general experience were the most common. A fifth of those who have difficulty recruiting administrative or manual workers report that pay is the key challenge.
With hiring externally becoming increasingly difficult, and two thirds (63%) of organisations agreeing that the skills needed for jobs in their organisation are changing, it’s clear that employers face significant talent management challenges ahead. To address the skills gap, 44% of organisations anticipate an increase in headcount in 2015. This is reflected by an increase in resourcing budgets, which have risen for over a third (35%) of respondents compared to just 8% of organisations in 2012 and 2013. In contrast though, the majority of organisations said that their talent management spend has remained the same (51%), prompting the CIPD to recommend that, alongside resourcing strategies, organisations need to invest more in developing internal talent, with a forward-focused view on how their skill requirements may develop in coming years.
Jessica Cooper, Research Adviser at the CIPD, said: “Organisations are increasingly feeling the pinch when it comes to sourcing key but scarce skills. In the ‘make or buy’ debate, the ‘buy’ decision still seems to predominate investment in talent, but hiring new talent is just part of the solution for addressing skills shortages. Once people are in a role, they still require ongoing development to achieve their full potential and meet ever-changing and critical skills needs. Organisations also need to consider how they can align recruitment activity with an increased focus on internal talent development, in order to build skilled workforces that can easily flex to fulfil future skills needs.”
Where organisations are looking to increase their headcount, the survey found that recruitment partners continue to form an essential link between businesses and the quality candidates they want. Twice as many organisations as in previous years are reporting that they have formed a closer partnership with their recruitment partners and consider them integral to attracting top talent, while only a third of respondents have reduced their use of a recruitment partner over the last 12 months. Given the need for strong candidates, a third (33%) of organisations said that they are putting more effort into the quality of individuals being hired and four-fifths (86%) of organisations had made efforts to improve their employer brand as part of their efforts to attract key talent.
Barney Ely, Director of Hays Human Resources, commented: “As the economy recovers, it is becoming increasingly difficult for employers to find the professionals they need to take advantage of growth. The fact that 34% of employers are working more closely with their recruitment partners shows that organisations are recognising this challenge and increasing their efforts to attract the right people through a more effective recruitment process.
“The survey highlighted a number of approaches that employers would consider to address their recruitment difficulties. Almost half (47%) of organisations are considering targeting candidates who are not looking to move while 43% would consider recruiting those with potential, but without experience, and then equipping these staff with the skills needed by the organisation. It is important that employers start to implement these ideas soon if they are to address the skills gap before it becomes too detrimental to business success.
“With falling unemployment and candidate confidence to move jobs increasing, staff retention is also firmly back on the agenda. Improved pay and benefits is one solution, but it is those organisations which are able to invest in learning and development opportunities in order to retain their most talented professionals and attract new talent that will find themselves at an advantage in a growing economy.”
The survey found that more than three-quarters (77%) of organisations have experienced challenges retaining staff. Most have taken steps to address retention, through improvements to pay, benefits, learning and development opportunities and improving line managers’ people skills. However, while ‘increased pay’ was a common tactic, it was also most commonly ranked among organisations’ least effective retention methods, highlighting how retention initiatives need to be closely aligned to employee preferences as well as meeting organisational objectives.
