Is Recruitment a Threat to Business Survival?

Recruiting is becoming harder

The world of recruitment is a fickle one. Shaped by demand and the economy on a wider scale, there’s much to be said for how fluid it can become and just how quickly. In more favourable times, jobs become more competitive to secure for employees, while when the industry has a surfeit of jobs, it becomes a candidates’ market.

The very real situation we find ourselves in is that there is a shortage of workers and that could spell trouble for companies already affected by cost rises and the pressures already recently put upon them by the likes of Brexit, COVID-19 and now the cost of living crisis that we find ourselves living through.

In early May 2022, 13% of businesses reported a shortage of workers, a slight decrease from the 14% reported in early April 2022; the accommodation and food service activities industry continued to report the highest proportion of businesses experiencing worker shortages, at 34%.

It may well seem like there was already a crisis in the world of employment. A lack of skilled workers and a drain on talent has left many companies re-evaluating their approach and more recently, focusing on retention.

How does this threaten a business?

For a business to remain solvent and competitive, recruitment and retention remains incredibly important. A company is only as good as its employees and if there is a disconnect between recruiting the right people and not being able to retain them, it can affect a business and its bottom line very quickly.

It’s often said that recruiting a new employee can cost more than simply trying to keep one, Glassdoor puts this at £3,000 and around 27 days which can soon add up when taking on multiple staff members.

The challenges come when the industry creates a demand and there are less workers to apply for positions. At the moment, wages are falling behind inflation, even with companies using them as a tempting magnet for applicants.

The Financial Times even cites that whereas the legacy of the pandemic might be seen to be labour shortages, what it might be known for is more wage inequality as higher paid workers are more insulated against inflation rises.

Increases in wages and a lack of candidates means many companies are drifting slowly towards trouble. The cost of replacing staff as well as the time invested to train and onboard employees can overwhelm a business, particularly in the lean times in which we find ourselves.

What can be done?

There is a sense that the market dictates how recruitment is shaped, however there are certain steps businesses can take to ensure they can retain staff and move with the times to remain competitive.

Here are just a few initiatives that work:

• Shape your business plan to include a comprehensive reviews process to ensure staff are happy and remain focused on their roles
• An upgraded pay scale or career path so that you can chart out progress transparently
• Introduce perks such as flexible working, more holidays, rewards systems or other incentive programmes
• Conduct staff surveys to address concerns
• Hold regular sessions where company progress and updates are given to make employees feel engaged

Help is out there

If you business is struggling then please get in touch. Call us for some free, no-obligation advice on 0800 975 0380 or email [email protected]