With 2022 and the Covid-19 pandemic now firmly behind us, a number of employers may be looking to 2023 with renewed optimism that the Great Resignation is a historical trend that will become the Great Attraction.
Whilst it’s too early to say whether the Great Resignation is over, there remain significant challenges for employers trying to attract new employees to their organisation.
The dichotomy of employees resigning at a time when the cost of living is increasing, coupled with employers struggling to attract candidates is a strange one.
With more than 600,000 workers leaving the employment market since the pandemic, the rise of economic inactivity – when working-age adults are neither in a job nor looking for one – is a huge challenge. The most recent figures from the Office of National Statistics show a record number of people leaving work and not looking for another job.
There are more than 9 million people between the ages of 16 and 64 that are now in the economically inactive category. This includes an increasing number of individuals who are classified as long-term sick – either due to a long Covid condition, or due to the increased NHS waiting lists delaying treatment of a new or existing condition.
This creates significant frustration for employers who not only can’t replace these individuals on a permanent basis, but also see the resulting increasing in pressure on existing staff who have to cover for those long term absentees. A catch-22 situation can then arise, with a cycle of existing staff more likely to want to leave due to the additional pressures, compounding the issue further for those remaining.
Whilst addressing long-term sickness absence is extremely challenging, all is not lost, as the remaining economically inactive individuals can be further broken down into five groups with similar characteristics. Employers can therefore develop a more tailored candidate attraction strategy for each group, including the acquisition of candidates on a temporary basis to help cover for long term sickness absentees.
The career-minded group tend to be made up of what we think of as the traditional pre-covid worker. Their primary focus is their career, and they are prepared to compromise on other work factors in order to achieve success. This group has less of a need for work-life balance and will be willing to travel further and work at home less than the other groups.
Much of this group are financially secure and are therefore only prepared to work for the right career opportunity with the right benefits package.
However, they are also the most in demand from an employer perspective, which creates significant issues in terms of remuneration – both in trying to retain their existing career-minded employees as well as attracting new ones. This can result in a self-perpetuating cycle of wage increases, promotions and large bonus structures.
This also means that in simple terms, in order to attract these individuals, it will come down to ensuring a competitive benefits offering.
The pandemic had a major impact on this group as it made a significant number of people question the role they were doing and how they were doing it. Furthermore, it proved that remote working on a more permanent basis was possible, enabling greater freedom and flexibility for employees not wanting to be forced into an office environment.
For the many thousands of employees who were either made redundant or put on furlough, they suddenly had time on their hands to think about other options to their current or previous employment. They became independently-minded, not wanting to be beholden to someone else.
Comprising mainly of 25-45 years olds, this group includes a large number of people who decided to set up their own business post-pandemic as well as those who are happy to work for an employer but only on their terms. They are extremely open-minded to changing roles and sectors, not wanting to be pigeon-holed into a specific one.
This means work-life balance and flexible working are the overriding critical factors in attracting these individuals back in to work.
To entice those who are self-employed back into the employed world, in addition to flexible working, offering a greater level of financial security and a remuneration package that’s better than what they currently achieve from running their own business is key. There are likely to be a significant number of newly self-employed individuals who have realised how much hard work it takes to run a business and so could be tempted back to employment for the right opportunity.
Similar to the Independently-Minded, this group also strongly values flexibility above all else, but they also have a high focus on community and environmental factors. As younger individuals, this group tends to be made up of 18-24 years olds, who have no dependents, mortgages, or other significant responsibilities, meaning the compensation package is rated a much lower priority factor.
This group presents a huge opportunity for employers as by enticing young individuals with the right offering, they are likely to reap a significant return in terms of loyalty and productivity in the long run. Offering apprenticeships or developing a graduate or early careers programme can deliver fresh and diverse insights to an organisation, as well as nurturing a talent pipeline for future succession planning.
Whilst lower compensation packages might make this an attractive group to recruit from, the key values for this group should not be overlooked. In reality, this is likely to mean providing a high degree of variety and flexibility in the role, ensuring a strong commitment to the environment, and partaking in community initiatives that deliver high on the social value front.
Flexibility should include the ability for individuals to continue studying part-time, whilst variety could include the individual being a roaming resource to support different teams when and where they need it most.
In addition, it’s crucial not to stipulate too high an entry requirement as this is likely to put off many high calibre and suitable candidates. For example, PwC recently removed the requirement for a 2:1 degree to work for their organisation in order to help increase the socio-economic diversity of their workforce.
This group consists of mainly middle aged individuals, 30 to 50 year olds and overwhelmingly female, who are having to care for others at either end of the age spectrum or even both – so young children and/or elderly parents / relatives.
Again, flexibility is the overriding critical factor here and many will have left the workforce due to the inflexibility of their employment making their ability to care for a loved one too challenging. This group are committed to a career and personal development, but not at the cost of having to forsake their carer responsibilities or if it increases the stress on themselves in order to achieve both.
However, the compensation package is also important, particularly with the current high cost of living. Most of these individuals will have financial responsibilities and so want to return to work but only if the role can dovetail with their carer responsibilities rather than increase the pressure. In addition, the remuneration offered must outweigh any additional costs of returning to work such as extra childcare and travel outgoings.
To entice this group back into the economically active workforce, opportunities will need to offer an attractive remuneration package with a high degree of flexibility. Allowing part-time roles, job shares, four-day weeks, and remote working will help tempt this group to an employer. Offering a strong employee benefits scheme which encompasses mental health support and carer leave would also be highly attractive to this group.
However, it’s also vitally important to offer a career development pathway, as these individuals are keen to advance in their careers and don’t want to be stuck in a rut doing the same role every day until their carer responsibilities subside – which may be never.
This group of individuals is primarily made up of financially secure, older individuals who are not looking for work as they have no need to. Many will have retired, or taken early retirement during the pandemic, but nevertheless, a significant number could be tempted back to work for the right opportunity.
Boredom and a lack of self-fulfilment will be key drivers for this group to return to work, perhaps having realised that retirement isn’t as good as they hoped. There will also be a proportion where finances will play a part – the increase in cost of living as well as pension pots not delivering the returns expected – may necessitate the return to work for some of this group.
With many employers are shunning these individuals, there is clearly an attitude shift required. In a recent survey by the Chartered Management Institute of 1,000 managers working in UK businesses and public services, just four out of 10 (42%) were open “to a large extent” to hiring people aged between 50 and 64.
Yet the reality is that this age group (and older) should be welcomed back with open arms by employers, given the significant experience they are likely to bring to an organisation. They are also more likely to be aligned to the traditional face-to-face work environment.
The key factors to attract these individuals are more complex as the motivations will differ depending on whether they are looking for work to add value or out of financial necessity. The latter will clearly require an attractive remuneration package whilst the former will be much more interested in ensuring the opportunity is right and they feel like they can make a valuable contribution. A great place to start will be contacting previous employees who have retired to identify whether they would be interested in a return to work and, if so, under what circumstances.
It is undoubtedly a significantly challenging market for employers trying to recruit quality people. The individuals classified as economically active currently appear to hold all the cards, with many being able to name their price regarding salaries and bonuses to move employers.
This results in the merry-go-round of employers driving up wages at an inflation-busting rate through poaching employees from competitors to replace those they’ve lost to competitors. In turn, this creates a snowball effect of existing employees demanding better pay to stay which they’ve seen ex-colleagues achieve by moving.
Employees meanwhile are often hit by a double whammy when they see colleagues leaving. Firstly, they’re put under additional immediate pressure to deliver more to cover their colleague’s workload as well as their own whilst the role is recruited for. Secondly, the departure of a colleague, particularly if they are popular and have become a close friend, also impacts the office environment and camaraderie. This makes it more likely they too will jump on the departure bandwagon.
Ultimately, the continual focus on acquiring high calibre candidates from the economically active pool is unsustainable due to the power such candidates currently hold in the market. As such, identifying and developing a more tailored candidate attraction strategy aimed at one or more of the economically inactive groups identified above, could prove far more fruitful in delivering a more cost-effective route to successful resourcing.
Critical to this will be developing and implementing an employer value proposition that delivers to the specific needs of each candidate pool. Flexibility is going to be key and unfortunately, for those employers who are keen to ensure employees return back into office environments, they will be severely restricting their access to a wider and more diverse candidate pool. Only by adapting and adopting new ways of working that economically inactive individuals can feel enticed by, will an organisation successfully attract them back in to the world of work where they are desperately needed.