What employers should be offering

by 17 Apr 2007

Companies need to take a planned approach in ensuring the future capability of their workforces, writes Leigh Clapham, MD of MasterCard

At a time when the skills shortage and the challenge of securing the right talent is on the radar for all HR managers, Australia is faced with the realisation that it is on the brink of a serious labour supply shortage.

No company can afford to bury its head in the sand. Instead they need to look for internal measures and policies to retain staff and keep their workforce strong. The challenge set for the HR profession is to develop programs and initiatives that improve retention levels and decrease turnover, through internal career change opportunities, investment in training, and to attract high value staff by being seen as an employer of choice.

Unemployment is already at a level some view as full employment and government forecasts show labour force participation rates are projected to fall by nearly 4 per cent over the next 20 years. This trend is expected to continue into the future, to a point where the labour force will almost stop growing, according to research conducted by the Productivity Commission and Australian Bureau of Statistics. All of this indicates that the war for talent will only become more intense in the coming years and decades.

Internal career change opportunities

While recruiting remains difficult and costly, more and more companies are facing the problem of losing staff because they want a change of career or focus. As employers, we need to acknowledge the effect this is having on our organisations and develop opportunities for internal progression and movement. Staff need to be given the chance to move on to new challenges within an organisation, otherwise they will look elsewhere, resulting in the loss of experienced staff and leaving behind vacancies that need to be filled.

The old career model of a single job at a single employer is accepted as outdated and unrealistic. This has been replaced by the modern trend of multiple careers during a lifetime, each at different employers. But why not give employees the opportunity to experience multiple careers, within the one company?

Herb Kelleher, co-founder and former CEO of the hugely successful Southwest Airlines in the US, is renowned for his HR philosophy of “hire for attitude, train for skills”. This approach could also help companies outside the airline business by ensuring they recruit staff who fit naturally into the corporate culture of the business and have a positive attitude that enthuses those around them, that ultimately encourages them stay with the company for longer.

A company that encourages its employees to move and develop across different fields, departments and borders within the one organisation will develop motivation and enthusiasm within its workforce. It will attract and retain intelligent individuals who thrive on new challenges, tasks and responsibilities, and have greater commitment.

Invest in training

For staff to move successfully within an organisation and avoid being pigeon-holed in a single role, employers need to provide training. And if companies train staff as generalists rather than specialists, they will enhance their employees’ feeling of importance, as well as improving the company’s ability to move staff from department or office to another.

One barrier to implementing good training initiatives is the cost. CFOs rarely embrace the expense of well constructed training programs. But this is where HR managers can show their strategic value. By presenting a solid business case on the costs of training and retention versus the cost of recruitment, HR professionals can help the company to transfer a cost from one unproductive area of the business to another that is much more beneficial.

Employer of choice

However, even if companies provide staff with training and career development opportunities, they will still need to attract high value employees in the first place.

Companies that promote their brand, are innovative and create harmony and a positive corporate culture attract high value staff. Striving to be an employer of choice, these companies recognise the value of non-financial factors that attract quality staff and inspire employees to have a long-term commitment to the organisation.

Companies throughout Australia are facing an even tougher employment market and must plan now for the future of their workforce. It is not just about securing the right staff but it is about developing staff internally so that they are motivated to stay.

If employers give their staff the option to develop their career, the ability to move to new stimulating challenges within the organisation, provide adequate training and make sure they have a positive working environment, they are planning effectively for the future of their business. This will not only give the business a competitive edge but will help to demonstrate the strategic contribution that HR can make to a company’s success.

Leigh Clapham is a member of Human Resources magazine’s editorial board