The past year has been extremely challenging for many organisations as the UK experienced its worst recession since the 1930s. This has clearly impacted and continues to impact resourcing and talent strategies across sectors. Through the CIPD’s annual Resourcing and Talent Planning survey[1], we take a look at the impact of the economic situation on current and future resourcing activities, before making some practical suggestions and recommendations about resourcing in turbulent times for heads of resourcing and talent.
Resourcing strategies and skills shortages
Over half (56%) of respondents have a formal organisation resourcing strategy. The top three resourcing objectives behind that strategy include attracting and recruiting key staff (79%), enabling the achievement of the organisation’s strategic plan (59%) and meeting the future skills requirements of the organisation (47%). See figure 1 from the survey[2].
As might be expected, there was a considerable decrease in the number of vacancies organisations tried to fill during 2009 compared with previous years. Yet, despite the reduction in recruitment activity, and the burgeoning labour market, two-thirds (68%) of organisations experienced recruitment difficulties.
Clearly, skills shortages do not go away, even in a recession and respondents maintained that managers, professionals and technical positions were the most difficult vacancies to fill. See the Studvik case study for a practical approach to tackling skills shortages head on.
Attracting and selecting candidates
The most effective methods for attracting candidates were through the organisations’ own corporate website and through the use of recruitment agencies, although there were significant differences in opinion across sectors.
Competency-based interviews (78%), interviews following the contents of candidates’ CV/application form (64%) and structured interviews (61%) were, as last year, the most common methods used to select applicants. The use of general ability tests has fallen although the use of tests for specific skills, literacy and/or numeracy remains constant.
Resourcing in turbulent times
Half of the organisations surveyed say the recession is having a negative impact on their resourcing budget for 2010. Unlike last year, when the public sector was less affected, this year they were equally likely to report cuts to resourcing.
More organisations will be focusing on developing talent in-house and retaining rather than recruiting talent this year compared with last. There are some indications that efforts to reduce recruitment costs will be made as substantially more expect to use new media/technology to recruit compared with last year.
Overall, fewer organisations will be implementing a recruitment freeze in 2010 (22%) compared with in 2009 (42%). More (65%) expect to continue to recruit key talent/niche areas in 2010 compared with 2009 (53%). However, the outlook seems much bleaker for the public sector this year, where particularly large proportions are anticipating recruitment freezes (51%) and reducing the number of recruits they hire (68%). See figure 3.
Case study: Using development and management training to address skills shortages at Studsvik UK
Looking forward
2009 was a tough year for UK business. The economic crisis that really hit the UK in autumn 2008 started the longest UK recession since the 1930s. Falling profits, reduced access to credit and increased uncertainty characterised the year for many organisations. The need to cut costs has led to widespread redundancies, despite the admirable efforts of many to explore alternatives. Unemployment grew, yet not to the extent many originally predicted, as the large international fiscal stimulus boosted the economy.
The effect of the external environment is reflected in the findings of the CIPD’s annual Resourcing and Talent Planning survey. There was a considerable decrease in the number of vacancies that organisations tried to fill. The changing balance in supply and demand of labour was also evident. Fewer organisations experienced recruitment or retention difficulties compared with previous years. With fewer vacancies available, many organisations experienced a notable increase in the volume of applicants, although significantly more reported the increase was of unsuitable rather than suitable candidates. Skills shortages remained an issue for many and twice as many organisations this year report that competition for talent is greater as the pool of available talent to hire has fallen sharply.
Looking forward, economic predictions forecast slow growth in the UK economy. In the private sector companies are finding ways to restore profitability. The public sector, however, anticipates significant budget cuts to address the national debt, with an increase in recruitment freezes and headcount reductions.
Resourcing budgets are expected to remain tight across all sectors and a strong focus on recruiting, developing and retaining talent will be essential for ensuring long-term profitability.
Recommendations
Some of the recommendations from our recent talent management research should be particularly helpful for organisations when thinking about their resourcing and talent planning strategies in turbulent times:
- Support and engage employees through the uncertain economic climate – communicate what is happening and why.
- Pay attention to your organisation’s skills shortages and develop creative options for building up knowledge and experience in these areas.
- Maintain momentum around your employer brand and, even if not currently recruiting, keep talent warm for the future.
- Consolidate the people management skills of your line managers to identify, assess and develop talent effectively (such as performance management, giving feedback and having effective conversations, coaching and engaging your people).
- Develop pivotal roles and opportunities for stretch assignments that are well supported.
[1] The CIPD’s annual Resourcing and Talent Planning survey is based on 480 respondent organisations from the UK and relates to the period 1 January to 31 December 2009. It is available from www.cipd.co.uk/research
[2] The figures in this article are ordered as per the original report and not renumbered. So there is no figure 2.