Last
year was the year of talent shortages. Prior to that, 2022 saw waves of quiet
quitting, while 2021 was marked by the Great
Resignation. Today’s employment landscape
constantly keeps employers on their toes, and this year is no exception.
I’ve
been speaking to both senior business leaders and candidates to understand what
firms can expect from employees in 2024.
There’s
one theme that keeps coming up: senior and even junior employees feel stuck in
their roles, and the disconnect between the cost of living and declining income
is making them less risk-averse when it comes to a career change.
Today’s
economy is tough, and to many it feels (and in many cases is) like working
harder no longer brings more rewards. For hard-pressed employers, this could
lead to a staff exodus and a continued struggle to fill positions. But for
businesses who keep their eye on recruitment and their finger on the pulse,
this rise of career changers provides new opportunities to attract top
talent.
The state of employment in 2024
One
observation I’ve made a few times is that bonuses are not going to be where
they’re expected to be in Q1 of 2024. Even finance professionals, who usually
earn twice as much in bonuses than any other industry, will feel the squeeze as
investment
banks announce further cuts to their reward pots.
But
it’s not just bonuses that are set to decline. According to statistics
posted by the Telegraph, British wage growth has slowed
from 8% to 7.2% - the most in nearly two years. Meanwhile, the cost of living
continues to soar, prompting an alarming 40% of UK
workers to consider a career change in an
effort to improve their living standards.
What does this mean for businesses?
These
statistics ratify the conversations I’ve been having with candidates and senior
leaders. Through no fault of their own, companies simply can’t reward their
workers properly.
As
a result, I predict that unprepared businesses will find it increasingly
difficult to withstand the impact of suddenly losing a key leader or valued
employee. Employers struggled to fill open positions last year, and with no
sign that cost of living will drop anytime soon, these talent shortages are
only going to worsen as more employees leave.
This
will be compounded by the fact that search firms are dominating the recruitment
landscape, with a keen eye on targeting highly desirable and diverse
candidates. This causes problems in businesses finding like-for-like
replacements.
An
unexpected departure also blows holes in an organisation’s succession
plan. You’ve invested months, even years into building
a diverse team of high-performing talent and nurturing them for future
leadership roles. That all unravels when a key employee decides to leave. Not
only does it create unanticipated gaps in leadership and expertise, it also
leads to a loss of institutional knowledge and challenges in maintaining
operational continuity.
So, what do employees want and how can businesses
respond?
Knowing
what employees want gives you an opportunity to tap into their unmet needs -
and gives highly skilled talent a place to go.
According
to the International Accounting Bulletin, today’s challenging economy has had a
profound impact on UK workers’ employment priorities:
- 38% want improved salary and benefits
- 29% want more flexibility to work from home
- 23% want more job security
As
an employer, you can no longer count on loyalty when other drivers force market
moves. To retain good people and future-proof your business, you may have to
consider higher counteroffers or other non-financial incentives, such as
promotions, shares or long-term incentive plans (LTIPs).
For
the financial services sector in particular, where talent shortage is a major
challenge for over 73% of
executives, businesses will have to look
outside of the industry in order to fill these gaps. This has the added benefit
of enhancing their diversity, equity and inclusion (DE&I)
efforts by bringing in fresh perspectives, diverse skill sets and varied
experiences.
How Hanover can help
The
rise of career changers creates a brand new pool of talent - and you can
benefit from it if you know how to capitalise on it. Whether it’s offering
flexible work arrangements or competitive benefits, knowing how to attract and
retain these workers will allow your business to stay competitive and win the
war for talent.
Doubling
down on retention efforts will be crucial this year. It will be equally
important for candidates considering a career change to have well-defined
priorities and trajectories. At Hanover, we facilitate both business and career
growth, helping to drive strategy for organisations and opportunities for job
seekers.
Contact
me directly to explore how you can retain
valuable talent or get more from your career.
