Money not enough in UK’s race for talent

Money is not enough to attract and retain talent and plug the skills gap. That is the central message of the CIPD’s latest report on resourcing and talent planning. They urge employers to look at what else they can do to attract and retain top talent beyond pay, including flexible and hybrid working. We’ll consider that and hear from an expert on how to ensure employee benefits are fit for a hybrid workforce. 

This is the CIPD’s report: Resourcing and Talent Planning 2022 which surveyed 1,000 UK-based HR professionals. The main findings: 
- 30% of employers who had recruited in the past 12 months say that advertising roles as ‘open to flexible working’ is amongst their most effective recruitment methods
- 54% of organisations who have had recruitment difficulties are offering greater work flexibility to address recruitment difficulties   
- 49% of organisations say their use of hybrid and remote working has greatly or somewhat increased, and almost a quarter expect this to increase further in the next 12 months 

Overall, they say the findings show that the world of work has changed forever, employees want to work for businesses that provide career development opportunities, and which offer flexible working.

Claire McCartney, senior resourcing, and inclusion adviser for the CIPD, says employers should not focus on pay, which many can’t afford. Rather, they need an array of other options to improve their benefits package, including hybrid and remote working. This, she says, will ‘strengthen their attraction and retention offering.’

A number of our clients have already onto that, and are rethinking their benefits package. The challenge, they say, is making the package relevant for all employees no matter where they are working, whether in the office, at home or in a hybrid arrangement. So, they want their staff to be able to pick and choose their own portfolio of benefits that works perfectly for them. Result? They are more likely to feel valued and stay loyal to the business. 

So, if we take flexible and hybrid working as a given, what else could the package include? One option that is proving popular with a number of our clients is a share plan, so let’s hear more about why that might work. Lynette Jacobs heads up our share plans team and earlier she joined me by video-link from Manchester to discuss it. So, how can share plans make employees feel engaged and valued? I put that to Lynette:

Lynette Jacobs: “So Joe, I think I would always have said, and would always say to companies, that the importance of having employee share schemes is there because of the opportunity for your employees to feel part of the wider group and I think even more so now as we're coming out, hopefully, of the Coronavirus pandemic, finally. For the majority of companies, employees will not be based in their offices full-time, some will be there 50% of their working week, some may be there for an even smaller part of their working week and, therefore, if you're sitting at home at your own desk, in your own office, the fact that you have shares in your company share plan will make you feel part of that company far more. You need to have ways to make your employees feel part of the group, albeit that they're not physically in the office, and just having the share plan and offering it to the employees, again, that's sort of a step in the right direction but what you need to do more, so it has the full impact, is to communicate those plans well to the employees so they understand the potential benefits to them of participating in them whilst, of course, not overselling, keeping away from any financial advice. Then if the employees are participating in the plans, don't only talk about the plans at the time there's a launch, but continually refer to them. So, if you can say what the share price is, from time to time, so that they can see that, all being well, the share price is going up and their value of their reward is going up. If there are performance conditions they need to meet, let's make it easy for them to understand the extent to which those performance conditions are being met as the award progresses throughout its life.”

Joe Glavina: “Ideally, you want a benefits package that has the flexibility to let employees pick and choose their own portfolio. Can share plans be tailored in that way?”

Lynette Jacobs: “It probably depends on the type of plan, I’d say, Joe. So, if you have one of the tax-advantaged all-employee share plans, the company has to offer it to all employees who meet certain requirements. So, generally, as long as they haven’t worked there for more than five years, they have to be offered the opportunity and companies will tend to have a much shorter qualifying employment period, maybe 12 months, before the date of grant, six months or even just anyone who's employed at the date of grant. So, the company would definitely need to invite the employees to participate in those plans, they couldn't choose not to. I guess the employee to choose themselves not to but I think it would be really against the legislation, I would imagine, for those plans to say, you know, you pick (a) or (b). So I don’t think you could do that. Potentially the company may have decided that it would be willing to grant the employee an option under a discretionary plan the company could then say, well, you could choose to have an option under this plan. or an award under this plan or, alternatively, to have your gym membership. I think if you're going to think about doing something like that you should speak with a friendly lawyer, for example, Pinsent Masons, to just check how you're doing it to make sure you don't come up against any of those things and fail to meet the requirements of the tax legislation.”

Joe Glavina: “So I guess there’s an important communications exercise here for HR?”

Lynette Jacobs: “Yes, absolutely, communication is everything. Again, as I say, just being very careful if it's a tax-advantaged plan that you don't run into anything where the plan you're planning to give to your employees ends up not having the tax advantages you were hoping for because of something you've said or done. Also, just making sure that you're not committing the company to granting options under a plan where it becomes a contractual right and, again, we would always warn against the company against doing that. But, yes, definitely, communication is everything so that employees understand what's available to them and the potential benefits and also potential downsides of those plans.”

The CIPD’s latest ‘Resourcing and talent planning report’ was published on 27 September and was produced in partnership with Omni RMS. It explores the difficulties that UK employers are facing in recruiting and retaining people during the cost-of-living crisis, and includes supplementary case studies which you might find useful. We have put a link to the report, and the case studies, in the transcript of this programme.

LINKS
- Link to CIPD’s report: Resourcing and Talent Planning 2022 with case studies