UK firms will face a rising talent shortage in 2014 as business confidence revives, according to a Hay Group survey. Britons have been reluctant to leave their current roles due to the turbulent market associated with the economic downturn, government spending austerity and the euro zone crisis, which kept turnover rates at bay. But as conditions improve, dissatisfied workers pose a significant flight risk for all organisations.
The study, which covers 700m employees in 19 countries, reveals that labour limits 12 per cent of businesses and would lead to 765,000 more departures compared to 2012. But the trend won’t stop there. In 2018, the number of departures will stand at almost 4.7m. Turnover rates for the next five years are predicted to rise from 14.6 to 18 per cent. This ranks the UK amongst the highest talent shortage levels in Europe.
Professional, scientific and technological sectors are expected to experience a period of mass migration. A quarter of new jobs created over the next five years will require science and technology based skills but, astonishingly, there will be a lack of people with these abilities. This will intensify demand for employees who possess such skills, challenge retention and drive turnover higher.
If businesses continue to ask their employees to do more with less, then solutions such as flexible work schedules will no longer be enough to sate the UK workforce.
Chris Smith, consultant at Hay Group, highlights that recognising and then meeting the needs of employees will be key to retaining talent in the next few years.
The analysis, which hoped to identify the key factors affecting employee retention, found that confidence in leadership, opportunity for career development, autonomy, supportive work environment and appropriate compensation were more likely to guarantee employee commitment.
As retention becomes a growing concern, organisations need to guard against the significant costs associated with hiring and training new employees, as well as potential talent shortages, by focusing on retaining key staff.
?Robust succession planning processes and identifying and developing high potential talent from within the business is now essential. Organisations also need to understand which key factors keep their employees engaged and respond accordingly whether that be compensation or other drivers of commitment,” said Smith.