Despite soaring inflation and the looming threat of recession, the UK labour market remains the tightest it’s been in decades. Towards the end of 2022, unemployment sat at 3.7%, with some 1.1 million job vacancies open by January this year. It should hardly be surprising then that competition for qualified candidates is fierce. Those conditions also mean that many companies risk their best employees to competitors.
- The job market is tight, with fierce competition for qualified candidates, leading many companies to risk losing their best employees to competitors.
- Companies need to do more than just offer competitive salaries and benefits to retain employees, especially in such a competitive market.
- Investing in internal mobility and upskilling can be an effective solution for retaining employees, by providing a clear path for career advancement within the organization and maximizing their earning potential.
In fact, May 2022 research from PwC showed that one in five UK workers expected to change jobs in the subsequent 12 months as they looked for better pay and opportunities. That, in turn, means that organisations have to work harder than ever when it comes to retaining employees.
But how should they go about doing so, especially if they can’t afford to dramatically increase salaries? Rather than team-building exercises and perks like free food in the office, the most effective solution probably lies in investing in internal mobility and upskilling.
Beyond salaries and benefits
Of course, competitive salaries and benefits are key to attracting the best talent, but they can only do so much when it comes to employee retention. That’s especially true in a market as competitive as the current one, where many other companies are willing to pay top dollar for your best employees.
As such, companies need to do more. Research has, after all, shown that a focus on total wellness will bring greater returns for the organisation beyond retention in the form of enhanced productivity and sustained performance
One of the most effective things they can do is lay out a clear path for internal mobility and advancement within the organisation. Remember, there is plenty of advice out there telling people that they need to change jobs every two to three years in order to maximise their earning potential. By giving them a clear career advancement path, organisations can make it just that little bit easier to retain their best employees.
Remember, career advancement isn’t just about pay jumps every few years. It’s also about someone using the expertise they’ve gained to take on new, rewarding challenges. And if an employee knows that they’ll be getting those opportunities with your organisation, they’re much less likely to look for them elsewhere.
Upskilling for improved loyalty
The same is true for initiatives aimed at upskilling employees. While some, more conservative, organisations might feel that upskilling employees is only going to make them more attractive to competitors, that’s an extremely short-sighted approach.
Most employees recognise that upskilling initiatives are an investment in them and are likely to reward that investment with loyalty. Moreover, they’re more likely to feel confident addressing the kind of internal challenges that might otherwise tempt them to leave. Small wonder then that research from PwC found that 77% of workers say they’re ready to learn new skills or completely retrain.
Upskilling has other benefits too. For one, it makes it much simpler to promote internal mobility. When your organisation knows that it’ll need a specific kind of skill in the near future, it can equip existing employees with them, rather than having to look outside of the organisation. Once other employees see their upskilled colleagues advancing, they’ll be motivated to do so too.
Another major advantage of upskilling is that it keeps your employees up-to-date with current demands and requirements. In turn, that helps keep your organisation innovative and ahead of its competitors. In other words, it helps ensure that the organisation remains the kind that people want to work for. That, in turn, makes it easier to attract the best available new talent.
Staving off the next great resignation
With some predicting that there’s likely to be another great resignation by Q4 of 2023, organisations are going to have a harder time than ever when it comes to retaining employees. But by focusing on internal mobility and upskilling, they can put themselves in the best possible position to stave off the worst of its effects. And if they really do things right, they might even be able to attract some of the people looking for a fresh career challenge.