More than three-quarters of companies in the EU are struggling to find workers with the right skills and right pay rates at the right time. The labor market is giving business leaders headaches, and to remain competitive in the rapidly evolving environment, it is vital to create comprehensive strategies for both attracting and retaining skilled workers. With that in mind, here are a few things that business leaders can consider as they look to navigate today’s unsettled labor market.
Ensure an effective strategy for rate rises. It may not be a surprise to hear that 57% of job searches are influenced by people seeking a higher salary. Money always talks, and this drives home the importance for firms to offer attractive salaries in order to retain top talent. However, at the moment many businesses do not have the luxury of increasing salaries across the board and so need to adopt a strategic approach to rate rises to ensure that they are aligned with their overall goals. By leveraging real-time talent and market data, they are able to target rate increases towards roles that are currently, or predicted to become, crucial to achieving their overall business objectives.
Hire without borders. In order to access a wider pool of talent, companies should consider hiring across borders, or even thinking of it as hiring without borders. Many firms that are struggling to find talent at the right price in their own markets are starting to look further afield in growing markets such as Central or Eastern Europe, where the rates that are demanded are not as high as in their native markets. With inflation in Europe still hovering around 10% and talent shortages across the board, this can be a great way to access the skills you need and reduce costs at the same time.
However, like any approach to talent acquisition, hiring without borders is not without its challenges. To get the most out of this approach, an extra effort will need to be made to manage the potential legal, regulatory and cultural issues that can arise. For companies to navigate these challenges successfully, they need a clear hiring strategy and should consider enlisting the help of third-party experts to provide valuable insight and support.
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Extend and upskill existing employees. Attracting the right talent is only the start — firms must think about how to keep hold of talent once people are onboard. In London, three-quarters of firms report that they have open vacancies, and of those businesses, 65% are struggling to fill these roles. Additionally, employee turnover rates are set to hit 35.6% in the UK in 2023, indicating that businesses must ensure they are doing everything they can to hold on to their talent and reduce their reliance on new hires.
Companies should focus on providing training and development opportunities as well as using their own native data to match existing employees with current job openings to help their employees grow and progress within the organization. Of course, the financial aspect is inescapable, and as skills rise, so should pay. However, it is about looking more holistically and making efforts to improve the overall employee experience that will be just as crucial in this regard.
As Europe grapples with the recession and the state of the labor market continues to burden leaders, there are effective actions that businesses can take to recruit and retain employees. Those companies that can efficiently utilize talent from every corner of the world, implement strategic rate rises and upskill existing workers can ensure that their business has the skills and expertise it needs to thrive.