Knowing the value of people in a transient skills economy.

July 19, 2018    Tim Frankland     , ,

UK employers are failing to grasp the full commercial importance of their people, according to new research.

UK-based Workplace Insight, the website dedicated to the design and management of workplaces, has reported that UK employers are facing an increased level of staff attrition, with as many as one in seven expected to be searching for a new job in the near future. Commissioned by Robert Half UK, the research revealed that 61% of employers have seen an increase in voluntary staff turnover over the last three years and that 51% expect this to continue.

Much has been written about how to build loyal, motivated and skilled workforces over recent years, particularly in the face of a global shortage for high performing talent, however it seems the message is still not getting through. In fact, the data proves it, as only 47% of surveyed employers actively support career development with training and development programmes and most don’t offer employee wellbeing-based initiatives.

Plenty of other research bears this out too – a Gallup poll revealed that a staggering 70% of employees felt disengaged and uninspired in their roles which, given that 75% of organisations don’t have an employee engagement plan or strategy (despite 90% of businesses understanding it impacts profitability and success), is not surprising. A similar study by Deloitte reported that 79% of business and HR leaders know they are struggling with retention and engagement, but only 24% feel they have the HR skills to meet those challenges and 83% feel they don’t have an engagement employment brand.

So why are companies still failing to see the value of people in a transient skills and choice-based economy? The first reason is recession hangover. Periods of austerity and tough decision making, particularly for businesses forced to down-size or close operations during a recession and its immediate aftermath, often carry on their ‘head down’ mentality long after the difficult times have passed. This focus on working hard can leave little room for truly engaging with or nurturing people.

The second and typically most common reason is poor leadership. Poor leadership encompasses out-dated hierarchical management styles and a lack of internal communication about shared goals or how employees fit into the bigger picture – both of which suggests that employee engagement is of little importance.

Finally, it’s about fear of change. Sticking to what you know and continuing to do things in the same way is not uncommon, particularly for smaller businesses, but this reticence to change is costly, potentially damaging relationships with employees who are searching for something different or simply to feel valued and appreciated.

Here are the six most compelling reasons to recognise and embrace the commercial power of people and to invest in the tools, culture and environments employees need to thrive:

• Engaged people are more productive – Figures from Gallup reveal that teams with high levels of employee engagement are generally 21% more productive than their low-engagement colleagues.

• Wellbeing matters – 57% of employees who said they were stressed at work felt they were less productive, compared with 10% of colleagues with low stress levels.

• Poor engagement means poor health – Research by the Queens School of Business and Gallup revealed that disengaged workers have 37% more absenteeism than their engaged counterparts, proving most costly to their employers.

• Lost talent is expensive – Replacing staff is said to cost British businesses in excess of £4.3billion each year, with the average cost per employee exceeding £30,000. For knowledge-economy businesses this figure stands to be far greater as the loss of good people means a loss of business intelligence and knowledge too.

• Engagement means out-performance – Organisations with engaged employees outperform those without by a staggering 202% (research from Business2 Community). The 2009 MacLeod Review of Employee Engagement highlighted that the top performing companies for employee engagement enjoyed 16% more profitability, 18% better productivity and 12% improvement in customer feedback.

• Unlocking discretionary effort – Employees that are encouraged to improve themselves and achieve their best at work will feel invested in, which translates into loyalty and a greater propensity to unlock extra discretionary effort.

With such a hefty rise in the number of high-tech industries, growth in the service sector and a self-employment boom, todays’ businesses have never been more reliant on their people. Business leaders need to recognise that their highly-skilled workers are in the seat of power for they have more choice than ever before and are not afraid to take their skills and value elsewhere if they are not given a culture of support, a workplace equipped with the right facilities to thrive, shared goals and clear opportunities, a commitment to wellbeing and a tacit appreciation that people are not an asset to be sweated, but one to be nurtured.

There is clear proof of what engaged employees can deliver to the bottom line. Business leaders must take notice of their most powerful business tool, for they can ill-afford to under-estimate the value of people.

To find out more about the war for talent and how to attract and retain the best talent, download our War for talent whitepaper, which is full of guidance and advice:

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