Weapons of mass recruitment

We are witnessing something of a skills war in the accountancy profession. Firms are competing for the most talented staff – particularly for auditors – and there are skills shortages in some areas. For those companies competing for talent, it’s all too easy to focus only on salary and benefits.

The ‘talent war’ is a growing corporate concern. Widespread change in organisational structure and patterns of employment means the traditional ‘psychological contract’ between employer and employee has been undermined.

Employers no longer offer lifetime job security in return for loyalty and commitment. And companies can no longer take employee loyalty and commitment for granted – it must be earned.

With the labour market tightening and unemployment at a 30-year low, traditional recruitment and retention tools – big salaries, golden hellos and golden handcuffs – are no longer enough to attract and hang onto valuable staff.

Financial lures are too easily matched and topped by competitors, and this can lead to endless rounds of poaching, high staff turnover and all the problems these entail.

Instead, companies must begin to explore how best to exploit qualitative, non-financial incentives, such as managerial attitudes, corporate culture and more social benefits.

In doing this, they can form the basis of a new type of psychological contact between employer and employee.

So how can the crucial, but generally tacit, set of expectations that exists between employer and employee be best redefined to encourage employees to commit?

Research by Henley Management College among 476 managers has thrown some interesting light on the issue. More than half (52%) saw their relationship to their employer as primarily a social exchange, while only 11% saw it as an economic exchange.

But the social values that maintain the relationships between employees and organisations have changed – the traditional values have been replaced by more independent values. Employees surveyed cited self-fulfilment, a sense of accomplishment and fun and enjoyment as being their top three values, ranking the traditional values of security and sense of belonging among the least important factors.

Employees are most inclined to stay with a company that offers opportunity for genuine personal development. Companies concerned with retaining staff should carefully consider the values and culture of the organisations that they are asking employees to accept.

Self-esteem is essential: it should be thought of as a resource to be harnessed, with mentors rather than ‘managers’ appointed to support individuals’ personal development. The main aim should be to ensure that each staff member’s individual needs and ambitions align as closely as possible to the corporate needs and targets, so that they do not have to leave the organisation in order to develop and find their self-fulfilment.

Employers and employees are certainly exploring new patterns of relationship, but it is not clear whether this constitutes a long-term change or simply a further twist in the spiral of global competition.

The change in the employee-employer relationship has not persisted long enough to constitute an established trend. But what is certain is that some sort of new balance is needed to maximise potential.

The evidence points towards an increasing need for training and development and a new deal based on a joint commitment to ’employability’.

The new contract also raises the profile of good people management. Senior managers determine the corporate strategy and HR policies that shape the working environment, but it is the immediate line managers who influence an employee’s perception of and relationship with the organisation.

Good people management also affects performance and creates competitive advantage. Policies based on ability, motivation and opportunity create higher levels of commitment, motivation and job satisfaction. The role of line managers and their managerial behaviour in implementing these policies and practices is critical. People join organisations but they leave managers.

Organisations able to embrace such responsiveness and flexibility will not only be in a far stronger position to retain staff, but they will also have a more engaged and committed workforce.

Tim Osborn-Jones is a senior tutor in the human resources and organisational behaviour faculty at Henley Management College

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