How employers are tackling recruitment and retention difficulties

The labour market has undergone significant change since the onset of the pandemic. Following an initial period of uncertainty and redundancies (mitigated to an extent by the Coronavirus Job Retention Scheme), with the reopening of the economy many employers have struggled to attract or retain staff, a situation compounded in certain sectors by the loss of many workers due to Brexit. Moreover, lockdown saw many furloughed workers change industry or reconsider their career priorities, exacerbating shortages in some areas, while increased home-working has cut some workers’ ties to specific locations for job opportunities.

We conducted a short survey in December 2021 to investigate the extent of recruitment and retention difficulties among UK employers and any steps they had taken to overcome these. The survey received responses from 14 organisations, broadly evenly drawn from the manufacturing & primary, not-for-profit, private services and public sectors, with a combined workforce of just under 190,000 people.

Extent and nature of recruitment and retention difficulties

Almost all organisations (93%) report that recruitment is currently either ‘very’ (36%) or ‘fairly’ (57%) difficult, the sole exception being a large private services employer. Few participants with recruitment difficulties regard these as a short-term issue, with the majority (92%) anticipating that these are more likely to be resolved over the medium term. One not-for-profit employer sees difficulties persisting long-term, due to what it perceives as long-standing underinvestment in the social care workforce at a time of increasing demand.

Reasons for difficulties with recruitment

The most common reason for recruitment difficulties, cited by over three-quarters (77%) of the sample, was that applicants do not have the right skills or experience. Competition from other firms, a shortage of applicants, and the perception that pay and conditions for specific roles may be unattractive to candidates, were also significant causes of recruitment problems (69% in each case). Just under half of respondents (46%) attribute recruitment difficulties to low pay, relative to competitors. One public sector employer sees this as a particular disadvantage when competing for candidates against firms in the private sector.

Affected employee groups

Despite the relatively small sample, certain roles are mentioned frequently as presenting difficulties. While these are sometimes industry-specific, such as social care support workers, many more span multiple sectors – eg drivers (supermarket delivery drivers, refuse vehicle drivers, forklift truck drivers or workers operating specialist vehicles at ports), IT staff, engineers and skilled trades roles. 

Current experience of retention

The majority of respondents (86%) report that retention is also ‘fairly’ or ‘very’ difficult, with just two organisations, both from the private services sector, indicating no retention difficulties.

Reasons for difficulties with retention

The reward package appears to have a slightly higher bearing on retention issues than it does on recruitment, with 83% of respondents with retention difficulties indicating that ‘higher pay on offer at competitors’ posed a challenge in retaining staff and 58% of the sample pointing to ‘better benefits on offer at competitors’ as a factor. One public sector respondent points to competitors in the private sector having greater scope to improve reward packages.

Only a third of organisations perceive a lack of development or progression opportunities as having an adverse bearing on retention, with the same proportion reporting issues relating to organisational culture or management style. Just one organisation pointed to a lack of flexible working options; this is one area where the pandemic appears to have had a positive impact, with several respondents having retained some form of hybrid- or home-working after the lockdowns; however, of course there are certain roles and industries that do not lend themselves to offering such flexibility.

Affected employee groups

The roles presenting the greatest difficulties from a retention perspective are broadly the same as those proving hard to recruit: engineers, drivers, social care support workers and skilled trades roles are all mentioned more than once. Two respondents also mention difficulties with retaining senior leaders. One not-for-profit employer said that its retention difficulties were for ‘trade roles mainly, but across all roles, people are evaluating their lives and what they want to do’ – echoing comments we have observed as part of other research that suggest the pandemic has prompted many workers to reassess their career objectives.

Retention issues appear more entrenched than recruitment difficulties, with a quarter of respondents anticipating that these are set to persist for the long term, while a further two-thirds are hopeful that they will be resolved over the medium term.

At the 11 organisations that provided staff turnover rates, these ranged from 5.2% at the minimum to a maximum of 31.5%. The median turnover rate was 15%. Turnover has risen over the past 12 months at the majority (85%) of respondents; if this pattern continues, median turnover rates may start to approach a level that would concern most firms, apart from those in sectors where a higher rate of turnover is common, such as fast food or hospitality.

Measures to address recruitment and retention difficulties

Pay-related measures

Just three organisations (21% of the sample), all in the not-for-profit sector, have started to pay signing-on bonuses in the hope of attracting more applicants, worth from £500 to £1,000. The main jobs in scope are support workers and skilled trades roles. Minimum service periods apply, ranging from one month (with a second instalment at three months) to three months. Only two respondents, both from the manufacturing and primary sector, provided specific details as to how they had improved starting pay rates to address recruitment concerns, and both had done so on a permanent basis. One manufacturer applied a general 4% increase at the time of the usual pay award, following a pay freeze in 2020 and a 2% award in 2019. The second awarded an 8.7% increase to manufacturing technicians.    

Improvements to non-pay benefits and conditions

Just over half the sample (57%) report that they have enhanced non-pay benefits or conditions in some way to address recruitment or retention concerns. By far the most popular options relate to flexible working, with 29% having introduced greater flexibility around hours or working patterns and a further 21% having enhanced their policies in this area. On a similar note, 29% have implemented greater flexibility in terms of work location, while 14% have improved their policies in this regard. In two cases, respondents have maintained the hybrid working options that were precipitated by the pandemic, allowing staff to continue with some home-working on a permanent basis. A further respondent, within private services, has implemented a more ‘people-friendly’ shift pattern in the area where it has been experiencing recruitment difficulties. Other improvements to non-pay benefits and conditions cited by individual employers variously cover cycle-to-work schemes, improvements to maternity or paternity policies, wellbeing initiatives and staff discount/salary sacrifice schemes.

Other strategies aimed at improving recruitment

Respondents were also asked for details of other steps they had taken to address recruitment concerns. Many such initiatives related to the recruitment process itself, for example, increasing advertising spend and/or using different media, such as radio, posters or local postcard drops to promote certain roles. One organisation has removed closing dates and now reviews and interviews applicants as quickly as possible, so as not to lose them to competitors. A third company that has been experiencing difficulties with driver recruitment has removed situational judgement questions from its driver application form, to make this part of the process quicker. Just one respondent (a public sector employer) mentioned that it had widened the recruitment pool to include non-UK nationals. Two organisations said they had sought to improve recruitment by investing in more training once new joiners are on board.

In terms of pay-related initiatives, one not-for-profit employer reported that it is considering implementing market supplements for certain niche roles temporarily. The same organisation is also considering moving the target point for some roles from median to upper quartile or band maximum.

Initiatives to boost retention

The survey asked organisations what steps they had taken to respond to retention issues. Two of the three most common measures, adopted by just over a third of the sample (36%), were pay-related, either in the form of increases to basic pay, or retention premium payments/market supplements. The same proportion of respondents have implemented or extended exit interviews, with a view to finding out why some staff choose to leave. Meanwhile two organisations (14%) have introduced greater progression opportunities for staff within their existing roles and three employers (21%) have increased the training on offer. One private services firm indicated that it had implemented a seasonal incentive worth £500 FTE for new and existing drivers (and multiskilled staff covering driving shifts) to work over the Christmas period (7 November to 1 January).