Lessons learned from 2022 that will help overcome recruitment and retention challenges in 2023

Nobody expected 2022 to be easy. Businesses were still recovering from the effects of pandemic shutdowns, increased sick leave, supply issues and reduced cash flow. But just when things were beginning to settle down after the upheaval of 2020/21, the UK cost of living crisis hit, with skills and labour shortages, and rising costs piling on the pressure. Now, as we enter 2023 in recession, SMEs need to come out fighting.

But smaller firms have one important advantage over larger corporations in times of change and economic uncertainty. Adaptability. Thanks to their nimbler size, they can respond to situations quicker, making changes overnight that will help them survive difficult times.

Here, we look at how taking the learnings from 2022 can help SMEs negotiate some of the key challenges in the new year.

Adapt to flexible working

Yes, it’s still a hot topic. The pandemic shook up the way many people work, and proved that most industries can adapt to a form of flexible working arrangements when they have to. And while numbers of employers offering flexible working have dropped since 2020/21, with 46% of workers reporting that their current role doesn’t offer any flexibility, the benefits to employees and employers speak for themselves.

Looking ahead, consider working with your staff to come to an arrangement that better suits them, whether it be flexitime, hybrid working, swing shifts etc. Listening to what they need will likely make them more productive, happier in their role and give them more reasons to stay.

It’s also important, especially in a recession, to look at flexible working as a potentially fruitful business strategy, not just as an employee-led benefit. A report by the Recruitment and Employment Confederation following the last recession found that “83% of employers believe that the UK’s flexible labour market helped stem job losses in the recession, and around 35% embraced flexible working to cope with tough market conditions”.

Adapt to retain talent

This year has also seen companies increasing salaries to bring in new talent, but this has led to a growing pay gap (7% on average) between new recruits and those in existing posts. This can leave current staff feeling undervalued, causing retention issues if not sensitively addressed.

Despite most salaries rising by 6% in 2022 for those in post, in real terms it has meant a wage drop due to inflation (ONS), leaving workers feeling the crunch when combined with the cost-of-living crisis. If your workers are able to do the same job for more pay and benefits elsewhere, there may be nothing stopping them.

While it’s true that people are likely to be more cautious about moving job during a recession for reasons of economic uncertainty in business and personal finances, it’s still important to do all you can to retain the talent you have.

You may be surprised to hear that salary increases aren’t the only thing that can help you retain staff. Another way is to boost your benefits package. The best way to get the most out of your benefits offering is to find out what your employees want. And it’s not often the most expensive option they choose. These days, it’s more likely to be something that makes their lives easier, like providing flexibility in their working hours to avoid wrap-around childcare fees or expensive commuter travel times.

With businesses having to find the cash to fund wage increases and higher starting salaries, budgets are having to stretch even further. If you’re facing potential redundancies over the coming months, you might also want to consider offering job share opportunities, reducing hours or having stand-down periods until you’re through the worst.

Adapt to attract talent

This year has seen some troublesome changes to the labour market. There remain more job openings than workers – a record high 1.3 million vacancies to May – so it continues to be a job seeker’s market. “No other advanced economy has failed to return employment back to its pre-pandemic level, with the UK an international outlier” (The Guardian).

While advertising posts with higher salaries may attract some new talent, it’s worth noting a continuing trend: job seekers these days are just as concerned with finding a company that offers good benefits and a business culture and values that match their own. Look at how your company culture is reflected in your recruitment process, from the advertisement wording and content right through to the job interview and induction process. Make sure you are promoting and operating under the culture and values you want your company to have to give you the best chance of attracting talent.

If you need support with your recruitment process, call Key Appointments on 0844 504 4666 or drop us a line at info@key-appointments.co.uk.