How are employers tackling recruitment and retention issues?

Back in August, Tim Kellet – Director at reward management consultancy, Paydata, contributed to our blog with a look at the top five trends in UK reward management – and how they are affecting employers. In his blog, Tim discussed the fact that 59 per cent of regional employers anticipate recruitment challenges in the year ahead. In his next blog, Tim follows-up by outlining the strategies being put into place by employers to overcome this.

Regional results drawn from the spring edition of our UK Reward Management Survey 2019 capture HR practices affecting over 34,000 employees. We examine practices around pay to the more creative approaches organisations are taking to attract and retain the right talent with increasingly stretched HR budgets.

1. Setting competitive pay awards

Salary benchmarking is a key starting point for employers. With 55 per cent identifying pay benchmarking as a key agenda item for 2019, employers can ensure they make informed decisions when determining pay levels across organisations.  The two most quoted drivers for pay increases are external relativities (70 per cent) and internal relativities (55 per cent), with companies ensuring that any pay increases remain competitive in the market and support parity of pay throughout organisations to maintain morale.

Pay awards remain constrained in the region. Whilst five per cent of respondents nationally reported pay freezes, 15 per cent have implemented a pay freeze in the region. The most common pay increase amongst 40 per cent of Peterborough-based respondents is two per cent. This is lower than the national average of three per cent, which has increased over the past year after a decade of relatively flat wage growth. Paydata offer regional and national benchmarking data to ensure that employers make informed choices when reviewing pay levels for the year ahead.

2. Granting out of cycle pay increases

This has been used as a retention tool according to some of our customers who use this to bridge the gap between official pay review figures and wider market pressures. Across the region, 77 per cent used out of cycle pay increases in 2018, with 75 per cent anticipating granting these types of increases in 2019. 47 per cent cite market pressures as a key driver for this. Anecdotally, customers say they are using ad hoc pay rises to address the recruitment and retention difficulties they are facing, which may be skewing the ‘official’ pay award figures reported by organisations.

3. Creating an inclusive and diverse workplace

With the gender pay gap reporting being followed up by the ethnicity pay gap regulations, these discrete initiatives are exposed to media, shareholder and customer scrutiny. This extends to potential and current employees, as it signals a fair and transparent place to work. Candidates increasingly ask for details on policies that can speak to a company’s culture, whilst morale is boosted in an inclusive and diverse workforce.

Regionally, one third of respondents are actively considering how they can tackle wider equality issues within their organisations, with 67 per cent already offering initiatives designed to promote equality and diversity. The most popular are:

  • Networking groups (designed to bring together under-represented groups to share their experiences and support one another’s progression).
  • Dedicated working groups (open to all employees to come together and ensure diversity is being championed across the organisation).
  • Development programmes (focused on the individual to ensure that dedicated training and support is available).

4. Listening to employees directly

Employee opinion surveys featured on 72 per cent of respondents’ agendas for 2019, illustrating the importance placed on maintaining momentum behind employee engagement. Whilst traditional reward strategies have sought to emphasize the value of loyalty with schemes such as long-term incentive plans based on hierarchies in the workplace, this does not reflect the multi-phased careers and flexible working models that are changing the face of the workplace. Less than a third of respondents offer long-term incentive plans as a result and loyalty does not automatically equate to larger pay packets either; one third of employers have had to offer new recruits salaries that conflict with those paid to existing employees.

Recognising that many individuals will have a longer, more varied career that requires them to constantly upskill to keep pace with technological developments is critical for organisations to attract and retain the right talent. This creates a more balanced relationship between employer and employee which requires listening on both sides – this has extended to entry interviews to gather feedback from individuals of their on-boarding experience.

5. Reviewing recruitment practices and talent pools

Accessing new or under-represented demographics in the workplace is an effective strategy to tap into new pools of employees. Identifying hiring practices that can access a range of talent pools is critical – and this can be assessed across ethnicity, age and disability demographics. BAME, working mothers and those aged between 18 and 29 being the three largest under-represented groups.

Reward that is designed to tackle and actively embrace an ageing workforce and ensure that a strong pipeline of talent is in place is a key concern of employers who are looking to future-proof their business.

By promoting diverse talent and maintaining the momentum behind employee engagement, you can create a thriving culture throughout your business and in turn, drive recruitment.

For more information about attracting and retaining the right staff, take a look at Anne Corder’s blog: Do you really have the right strategies in place to attract and keep staff?

Download the key findings of Paydata’s UK Reward Management Survey Spring 2019 and sign up to receive notifications about the autumn survey. To talk to Tim Kellett about any aspect of your pay and reward, please call 01733 391 377 or email

About the Author

Tim Kellett

Tim Kellett

Director of Reward Management Consultancy Paydata

Tim Kellett is a Director of Reward Management Consultancy Paydata, who has helped hundreds of employers with their pay and reward strategies to unlock the full potential of employees. With over 20 years’ experience in pay and reward, Tim is a passionate HR specialist.