Talent management is one of the biggest concerns of UK SMEs when asked about the challenges they face, according to business experts. When SMEs represent a significant part of the UK economy – accounting for nearly half of business employment and turnover – it’s important they get it right but constraints in time, resources and expertise often get in the way.
What are the benefits of good talent management?
Businesses can have different views on what they mean by talent management. In essence, it’s all about the way firms attract, develop, engage and retain valuable employees. Successful talent management is good for business because it means employers can:
- Recruit excellent staff who will take the business further
- Reduce recruitment costs due to reduced staff turnover
- Save time on inducting new staff and getting them up to speed
- Save on your training budget and develop a more focused training programme.
Challenging times ahead for SMEs
Even the best businesses can struggle to recruit and retain staff. It is even more difficult in uncertain economic times when the ground seems to be constantly shifting.
– ONS reports show that net migration in the UK has fallen to the lowest level in three years; down to 246,000 from 327,000 in the last year.
– a workforce deficit is likely to emerge over the next seven years – a result of 14m employees retiring but just 7m people of working age entering the market .
The UK SME Confidence Index (Vistage, June 2017) claims that despite the challenges of Brexit and the economy “finding and retaining the best people is a major concern” of UK SMEs.
Building capability for the challenges ahead is even more important for smaller firms. The Recruitment and Employment Confederation say that the shortage of staff for British employers has worsened recently, with UK businesses struggling to hire and fill roles such as chefs, drivers and warehouse workers.
What can SMEs do?
While not necessarily benefiting from teams of dedicated HR staff, smaller firms are by definition more agile and likely to know their employees better. They tend to operate more informally and owner-managers are more common. This means they can be more nimble in identifying needs and implementing them.
- Be proactive – don’t sleep walk into recruitment when there’s a vacancy. Consider undertaking a skills audit in the firm. Be proactive and develop a recruitment strategy for the type of skills and experience you want on-board.
- Identify promotion opportunities – review your staff’s skills regularly and identify any advancement opportunities that you can offer good employees so that they feel valued and engaged.
- Have a training and mentoring programme – where appropriate, identify any training you can provide which will boost the skills of staff – it will be cheaper for you in the long run and your business will benefit from the continuity and staff retention.
- Offer a share incentive scheme – a stake in the company where possible can incentivise existing employees and attract key new talent – the CIPD this month featured the advantages of the enterprise management incentive (EMI) for UK SMEs.
One top company will next month receive Personnel Today’s Award for Talent Management. The organisations shortlisted were praised for their achievements in this area – their tips on talent management included:
- Introducing personal development programmes to improve staff knowledge (Renault Retail Group)
- Identifying the best performers to develop and stretch them – to help create future managers (Worcestershire County Council)
As we can see, talent management doesn’t always involve more money. In fact it’s even more important to have a creative talent management strategy when there is no chance of pay rise or bonuses on offer. Numerous studies have in fact found that offering challenging work and/or development opportunities as described above are a strong driver of employee engagement. A bonus for businesses is the clear link between skills development and increased productivity.
Chronologic’s workforce management system brings together all your HR information, including logging skills and training information by employee.