Recruitment and retention is an essential component of your business growth strategy. Canada’s jobless rate is at a record low, leading to fierce competition among employers to find and keep employees with the skills they need. Despite this, research from recruitment firm Hays Canada suggests there’s a misalignment between what employees want and what employers are offering to give them. Rowan O’Grady, president of Hays Canada offers insights into how you can be more competitive when it comes to attracting and retaining skilled talent.
Can you give some context to the state of job growth in Canada?
We conduct a survey every year with over 3,500 hiring managers in many different job functions across multiple industries. We ask questions around employee retention, compensation, confidence and challenges that employers are facing. We found that, overall, there’s a lot of confidence in 2018. The majority of managers we interviewed feel good about the Canadian economy. There’s a higher proportion of companies that plan to add to their headcount in 2018, both in terms of employees and consultants. The number of companies that intend to hire temps or contractors has tripled this year, compared to all of the past three years.
What does a more competitive job market mean for employers when it comes to retaining current employees?
I don’t think employers are as sensitive to losing staff members and people leaving for better offers as they should be in the current job market. Candidates are realizing that with all this job growth, this is an awesome job market and if you don’t pay me or treat me well, I’ll leave for something better. Employers are in the frame of mind that ‘this hasn’t been a major problem for me recently, I didn’t give them an increase last year and it didn’t cause a problem so it should be okay this year, too’ but that’s not the case.
One of the surveys we did recently is called What People Want. This is where we get into what job candidates are looking for in an employer. We have seen a steady increase in dissatisfaction of people in their current jobs. More people say they would entertain a new job opportunity if the right offer came along. For many years, that number was stuck at around 75%. Now, 90% of people we interview say they would be open to changing jobs.
Employers need to seek employee feedback on a regular basis and make sure they’re able to respond to employee demands as they shift and change.
Can employers offer better financial compensation to retain employees?
Yes, but there’s a disconnect between what employers say they need, in terms of retaining people, and what they’re willing to do to make it happen. There’s all this positive response from employers, saying the economy is good, business activity looks good, we’re going to hire more people, permanent and contract. But then we ask what their plans are for retention, the positive pattern breaks. Over the past four years, there’s been a continued trend toward more companies offering less than 3% salary increase.
At the same time, we know that 40% of employers are willing to break salary guidelines to recruit new hires. This is problematic because now they’ve got a two-track approach to salaries. Employers need to invest more than 1.5% annually in their current employees, which is very conservative and doesn’t account for cost of living increases. It’s okay to offer that 15% over expected salary to attract highly skilled professionals to your firm, which is quite aggressive, but you need to do the same for the employees you already have.
Are there ways employers can be more competitive without offering more financial compensation?
Yes. One of the biggest influencing factors on whether people decide to stay or leave and whether people decide to take a new job offer revolves around career progression and professional development. When candidates think about career and professional development they want variety, change, challenge and to feel like they’re continually learning.
Employers often make the mistake of equating career progression with promotion or salary increases. But what really makes a difference and what makes people feel like they’re progressing is learning new things and feeling that their employer is investing in them. Employers need to make training a central part of their employee growth plans. In some cases, even putting an employee in a position where they have a great mentor, maybe a boss they can learn from, can go a long way to increasing employee satisfaction. Candidates tell us they want to take on new challenges or work on innovative projects or with a different team. If companies put some of these measures in place, it will make for happier employees who are more loyal to your company.
In practice, how can companies offer career progression without breaking the bank?
Often you don’t even have to go outside to offer training. The most successful companies move people around. The employee may stay at the same level and make the same money, but doing new things or having different responsibilities gives them a new lease on life. This doesn’t necessarily cost anything. But it does require some thinking to formalize this approach, having managers and leaders positioned as mentors for existing people in the business.
Communicating succession and growth plans to employees is also important. Our research has shown that 60% of Canadian companies don’t have a succession plan. But people want to know what the future holds. Creating a succession plan to show that in five years’ time, we want the company to grow to a certain size and we’ll need three extra VPs and five managers and communicating to employees that you want them to make it, goes a long way. Let employees know that you’re willing to invest in them and develop them.
What advice do you have for companies that are having trouble finding people with the right skills to compete in the current economy?
This is a big issue and many people say it comes down to government and educational institutions to fix it. But employers have a role here too, to make sure their employees have the right skills for the current and future job market. Some companies say they’re reluctant to spend the money to train employees, because there’s a risk that, in a few years, the employee will up and leave for a better offer. But if you think about it, it’s a risk worth taking.
Employees want career progression. If you’re a small company, paying for employee training to give them that sense of value and professional development may be a lot less expensive than a 3% annual salary increase, and it’s more likely to encourage them to stay with your company longer. Not only that, but they may even be positioned to train others in the organization and strengthen the workforce as a whole.
3 ways to be a more competitive employer
1. Take care of the employees you already have
It’s far more cost effective to nurture the people you have on board than it is to replace them. Consider implementing annual salary increases and offering performance bonuses. But also think about investing in training and development. Check in with employees to get feedback on how you can make them happy so they’re not one of the 90% ready to leave when the opportunity arises.
2. Hire for both potential and experience
Too often job descriptions are focused on function. Hiring candidates with the aptitude to develop into work that is multi-faceted is key in the current environment. Workplaces are changing so rapidly today, with the rise of technology and the fast pace of global business that a specific skill set may become obsolete before you even get a candidate up to speed in their new role. When writing job descriptions and conducting interviews, identify transferable skills, as well as measures of aptitude such as passion, communication skills and a willingness to learn.
3. Tie employer brand to corporate brand
Having HR operate in a silo is an idea that’s long past its expiration date. You need employees that will act as ambassadors for your firm. Top employers recognize that recruitment should be tied directly in with a firm’s brand strategy. What are the emotions you try to evoke when selling your product or service? What makes your firm unique? Your employee recruitment strategy should directly link to your business growth strategy. Treat employees and potential employees like your best customers.