Recruitment still a major challenge despite economic slowdown

The "war for talent" continues, despite the recent slowdown in the economy. The latest recruitment survey from people management experts The Chartered Institute of Personnel and Development shows that three quarters of the 747 organisations surveyed are experiencing recruitment problems - this compares to just over half in 2000. This figure rises to a staggering 89 per cent in the public sector. Over fifty per cent of the organisations surveyed are also struggling to hold on to their employees.

A broad range of jobs are affected and the main reasons are a lack of suitably skilled and high calibre people and employer inability to offer people what they want both in terms of pay and reputation.

But organisations are getting more sophisticated in an increasingly competitive jobs market. While over sixty per cent have upped the salaries on offer, the respondents are also recognising that simply offering more money to get the right people on board and to keep them is not enough.

In the public sector 79 per cent of the organisations in the survey had changed their recruitment practices in an effort to boost success. This included reviewing the process and adopting a more professional approach - even if it cost more. There is also an increasing use of competency based testing and assessment centres. There was little use of "golden hellos".

The survey also shows that fifty per cent of those surveyed are struggling to retain staff, particularly young people. Measures to keep people include the development of a more attractive "employer brand" and offering more flexible working arrangements. As well as tapping into new sources of labour, organisations are being much more flexible so as to appeal to staff with a diversity of needs and motivations.

CIPD Assistant Director Duncan Brown said, "The good news is that despite the variable economic climate, companies are making more strategic and effective long-term investments in the motivation and retention of their people as the basis of future business success."

Key Findings

This is the sixth CIPD annual report on recruitment and selection practices, key issues and trends, and has been extended and improved this year. It draws on a survey of 747 employers and feedback from two focus groups.

Retention is growing in importance due to recruitment difficulties, high labour turnover and the need to motivate staff affected by reorganisation. 50 per cent of the respondents had retention problems, particularly with younger employees being less loyal and more difficult to keep hold of.

Recruitment difficulties were widespread in 2001, and affected a greater proportion of vacancies than in the previous year.

Causes of such difficulties focus on four factors: candidates' lack of relevant experience; candidates' lack of relevant technical skills; recruiters' inability to meet salary expectations; and a shortage of high-quality applicants.

Diversity policies have been developed by a quarter of employers, rising to a half in the public sector.

Selection criteria vary in their focus depending on the level/responsibilities of the post. Higher-level vacancies (particularly managerial) take account of the broadest range of possibilities: that is, not only the current vacancy, but also more demanding jobs that the person might progress to in the future.

Current recruitment methods continue to reflect the co-existence of informal and formal methods; overall, local newspaper advertising is most common, followed by e-mails and other electronic types of recruitment

Current selection methods used by employers often involve combinations of techniques from a potentially wide range; however, the most common methods continue to be interviews, application forms, CVs and references.

Electronic recruitment Three-quarters of recruiters now use at least e-mails to handle applications or enquiries, and just over half use their corporate website. Fewer than one in three uses a job board.

Innovation and change in recruitment and selection practice are widespread, particularly in the public sector. Often, the measures have been taken to address recruitment difficulties. The most common involve speeding up the recruitment process, offering additional ways to apply for posts, being more flexible in the use of recruitment methods, and offering flexible hours of work to attract applicants.