Annual survey report 2011

in partnership with

RESOURCING AND TALENT PLANNING

2011

2011

CONTENTS
Foreword Summary of key findings 1 Recruiting employees 2 Resourcing and talent management in turbulent times 3 Diversity 4 Managing labour turnover Conclusions Background to the survey Further sources of information Acknowledgements Footnotes 2
4
7
20
27
29
33
35
38
39
40

RESOURCING AND TALENT PLANNING 2011

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RESOURCING AND TALENT PLANNING

fOREwORD
Welcome to the fifteenth edition of our annual Resourcing and Talent Planning survey report. As in previous years, we provide useful benchmarking data for organisations on resourcing trends, costs and turnover. This year we have included new topical sections – which we hope you will find useful – examining the employment of younger workers, the length of the recruitment process, the nature of job vacancies, relationships with recruitment partners and the use of strengths-based approaches to recruitment. The headlines from this year’s findings are that recruitment activity remains low, yet organisations are experiencing recruitment difficulties in spite of more people in the labour market. The top reason for the recruitment difficulties is a lack of necessary specialist or technical skills. Strategies employed by some to try to fill skills shortages include increasing their use of apprenticeships, interns and considering sponsoring students through universities. Employers however need to think more holistically and long term when it comes to skills shortages, such as linking up with educational establishments to ensure the curriculum is preparing students well for the world of work and developing their internal talent pipelines around skills shortage areas. We feature a case study in this report from the Association of Greater Manchester Authorities (AGMA). This real-life example helps to bring the findings to life and provide some practical evidence of how organisations are reconfiguring their resourcing and talent strategies for maximum effect in difficult times. Claire McCartney Adviser, Resourcing and Talent Planning CIPD Julie Waddicor Managing Director, Hays Human Resources, the leading recruiting expert This research suggests these problems look set to continue and will only get worse long term due to the rising number of young people not in training, education or employment, if organisations fail to address underlying problems. Added to this many of the challenges that organisations have always faced still remain current, such as a shortage of professionals with specialist or technical skills and the poor image associated with certain professions. This highlights the need for UK organisations to invest in designing a creative resourcing and talent attraction strategy now more than ever before. Despite continued high unemployment, many UK organisations continue to face difficulties in attracting professionals with the right skills and experience. Hays has observed an increasing tendency for organisations, regardless of size or sector, to become more rigid with regards to the people they wish to recruit. Employers are less likely to compromise than they have been in the past and will delay recruitment until they find someone with exactly the right skills, qualifications and experience. At the same time job roles are becoming increasingly niche, which only adds to the recruitment difficulties employers face today.

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2011

ABOUT US
Chartered Institute of Personnel and Development
The Chartered Institute of Personnel and Development (CIPD) is Europe’s largest HR and development professional body. As a globally recognised brand with over 135,000 members, we pride ourselves on supporting and developing those responsible for the management and development of people within organisations. Our aim is to drive sustained organisation performance through HR, shaping thinking, leading practice and building HR capability within the profession. Our topical research and public policy activities set the vision, provide a voice for the profession and promote new and improved HR and management practices. We know what good HR looks like and what HR professionals need to know, do and deliver at different stages of their career, be they specialists or generalists, working in the UK or internationally. www.hays.co.uk Its recruiting experts deal with 150,000 CVs every month and more than 50,000 live jobs globally at any one time. The depth and breadth of their expertise ensures that Hays understand the impact the right individual can have on a business and how the right job can transform a person’s life. Hays works across 17 specialist areas, from healthcare to telecoms, banking to construction and education to IT. It operates across the private, public and not-for­ profit sectors.

Hays
Hays is the world’s leading recruiting expert in qualified, professional and skilled work. It employs over 7,000 staff in 257 offices across 30 countries. Last year Hays placed around 50,000 people in permanent jobs and nearly 180,000 in temporary positions.

RESOURCING AND TALENT PLANNING 2011

We offer:
• membership • professional development including

qualifications and training
• networking opportunities and world-class

events
• expertise in HR capability-building and

consultancy services
• topical insights and analysis • a wealth of resources and a voice for HR.

cipd.co.uk

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RESOURCING AND TALENT PLANNING

SUmmARy Of kEy fINDINGS
The CIPD’s 2011 Resourcing and Talent Planning survey report, produced in partnership with Hays, contains valuable information on current and emerging trends in people resourcing practice. This annual benchmarking survey is based on 626 respondent organisations from the UK. The survey examines organisations’ resourcing and talent planning strategies and practices and the key challenges and issues they face. New question areas this year examine the employment of younger workers, the length of the recruitment process, the nature of job vacancies, relationships with recruitment partners and the use of strengths-based approaches to recruitment.

Resourcing strategies and objectives
• Just over half of survey participants report

Graduate recruitment
• Two-fifths of organisations are concerned that

having a formal resourcing strategy.
• Larger organisations are most likely to have a

the increase in university tuition fees will have an impact on the number of graduates in the marketplace.
• One in ten organisations are considering

resourcing strategy.

The number and nature of vacancies
• On average the number of vacancies

sponsoring students through university (20% of manufacturing and production), 22% increasing their use of internships and 30% increasing apprenticeship schemes (48% of manufacturing and production).
• Just over a quarter of organisations operate a

cipd.co.uk/2011resourcingandtalentplanningsurvey

organisations attempted to fill in 2010 remains as low as in 2009, during the recession.
• The number of vacancies in very large

organisations, particularly in the public sector, has dramatically reduced over the past three years.
• Three-quarters of permanent vacancies were

structured graduate recruitment programme (35% of manufacturing and production).
• Few organisations have closed graduate

filled with external candidates.
• Three-fifths of organisations require candidates

recruitment programmes over the past 12 months; however, half of public sector organisations had reduced their intake (50% compared with 20% in the private and not-for­ profit sectors).

to have specific sector experience.
• Twice as many public sector organisations

(48%) expect they will recruit fewer people as a consequence of the abolition of the Default Retirement Age (23% overall).

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2011

Recruitment difficulties
• One in three organisations report the length of

Resourcing in turbulent times
• Half of the organisations surveyed report the

their recruitment process has led to the loss of potential recruits.
• Three-quarters of organisations experienced

economic climate has had a negative impact on their organisations’ resourcing budgets for 2011–12. This year, it is the public sector that is most severely hit, with four out of five (82%) reporting their resourcing budgets will be reduced (up from 59% last year).
• Changes in resourcing and talent practices in

recruitment difficulties in the past few months.
• Managers and professionals and technical

positions are the most difficult vacancies to fill.
• As in previous years, the main reason for

recruitment difficulties is a lack of necessary specialist or technical skills.
• Nearly three-quarters of organisations had made

2011 compared with 2010 reflect a stronger focus on costs and reductions in budgets. More organisations anticipate they will be focusing on developing talent in-house, retaining rather than recruiting talent and reducing their reliance on recruitment agencies and external consultants for resourcing and development.
• Nearly half of public sector organisations will

efforts to improve their employee brand over the last year, most commonly through employee surveys and developing online career sites.

Attracting and selecting candidates
• While the effectiveness of methods to attract

be implementing a recruitment freeze in 2011, compared with one-fifth of organisations overall. Two-thirds of public sector organisations and 29% of private organisations will be reducing the number of new recruits they hire.
• The volume of applicants for vacancies has

applicants varies according to organisation sector and size, the most effective method overall is reported to be through organisations’ own corporate websites, as was the case last year.
• The private sector, particularly manufacturing

and production organisations, are three times more likely than public sector organisations to include recruitment agencies among their most effective methods for attracting candidates.
• Overall, a third of organisations report they

increased, reflecting the high unemployment rate. Three-quarters of organisations have noticed an increase in the number of unsuitable applicants and a third report that there are too many suitable candidates to choose from. Despite high unemployment over the last two years, more than half (52%) believe that competition for talent is even greater as the pool of available talent to hire has fallen sharply (2010: 41%; 2009: 20%).
• Most organisations remain focused on

have reduced their use of recruitment partners; however, one in five report they have formed a closer business partnership with them over the past year and one in ten that they consider them integral to attracting top talent.
• Competency-based interviews (70%), interviews

RESOURCING AND TALENT PLANNING 2011

following the contents of CVs/application forms (63%) and structured interviews (56%) are, as last year, the most common methods used to select applicants.
• Two-fifths of organisations report they use

managing talent despite increased attention on reducing costs, with only 4% reporting that their focus on talent has decreased. Nevertheless, 18% of organisations (32% of the public sector) have reduced their overall talent management spend as a consequence of the economic downturn.

a strengths-based approach to recruitment, although it is less commonly used in the public sector (26%).
• The median recruitment cost of filling a vacancy

is £7,500 for senior managers/directors and £2,500 for other employees (adjusting for accuracy), showing reductions compared with last year.

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RESOURCING AND TALENT PLANNING

Diversity
• Overall, in little change from previous years,

Employee retention
• Only two-fifths (42%) of organisations

just over half of organisations have a diversity strategy, rising to 90% of public sector organisations.
• Our figures indicate a reduction in the use of

experienced no difficulties in retaining staff during 2010, a similar figure to the previous year. Managers and professionals/specialists and technical employees remain the most difficult categories of staff to retain.
• Most organisations have taken one or more

several methods to address diversity issues this year, particularly in the public sector, which has traditionally led the way in diversity practice.

steps to address staff retention; however, nearly one in four organisations (a similar proportion to the previous year) report that no specific retention initiatives were undertaken in 2010.
• The most frequently cited actions taken by

Labour turnover
• The median labour turnover rate has decreased

over the past few years (2011: 12.5%; 2010: 13.5%; 2009: 15.7%; 2008: 17.3%).
• Smaller organisations are most likely to report

employers to address retention – improving the people management skills of line managers and increased learning and development opportunities – are the methods most commonly rated most effective. Improving the induction process is also commonly used to address retention but views on its effectiveness are more mixed.

that their labour turnover has increased and larger organisations that it has decreased.
• As in previous years, the majority of turnover

is attributed to employees leaving voluntarily. The rate of voluntary leavers has increased slightly in the private sector compared with last year but decreased in the voluntary and public services sector, reflecting the growth/cuts in the respective sectors.
• The proportion of organisations making ten

or more redundancies over the past year has reduced from 33% in 2009 to 12% in 2010.

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1 RECRUITING EmPLOyEES
This section explores trends and developments in recruitment strategies and activity within UK organisations during 2010. It examines the adoption of formal resourcing strategies, changes in the number of job vacancies organisations attempted to fill, the extent and nature of recruitment difficulties over the past year and the strategies employers use to overcome these challenges. It also includes developments in graduate recruitment, the most effective approaches for attracting applicants and the methods used for selection. For the first time we explore the nature of job vacancies, the length of the recruitment process, the employment of younger workers, changing relationships with recruitment partners and efforts to improve the employer brand. Finally, the costs associated with recruitment are discussed.

Resourcing strategies
Just over half of respondents surveyed report their organisation has a formal resourcing strategy in place, a similar proportion to last year (2011: 54%; 2010: 56%; 2009: 58%). The likelihood of organisations having a formal strategy in place increases with organisational size, as was the case last year (Table 1).1 There are no significant sector differences.

Table 1: Organisations with formal resourcing strategies in place, by size (%)
Size – number of employees in UK %

RESOURCING AND TALENT PLANNING 2011

Fewer than 10 10–49 50–249 250–999 1,000–4,999 More than 5,000
Base: 604

26 38 46 55 68 85

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RESOURCING AND TALENT PLANNING

The number and nature of job vacancies
There is considerable variation in the number of vacancies respondents’ organisations tried to fill in 2010, partly because the number of vacancies is strongly related to organisation size (Table 2). Overall, the median number of vacancies
2

While there is no overall change from last year in the median number of vacancies organisations tried to fill, there has been a substantial fall in the proportion of vacancies very large organisations (5,000+ UK employees) attempted to fill, from a median of 550 in 2009 to 200 in 2010 (800 in 2008). The reduction in vacancies in very large organisations is striking in the private and public sectors, but particularly in the latter, where the median number of vacancies organisations attempted to fill in 2010 was less than a third than in 2009. This reflects the sluggish growth in the private sector and, in particular, the significant cuts in public sector budgets.

has fallen from 30 in 2008 to 20 over the past two years as the recession affected increasing numbers of organisations (Table 2).

Table 2: Median number of vacancies respondents tried to fill, by size of organisation and sector
2011 survey No. of permanent staff employed in UK All Median Private sector Median Public services Median All Median 2010 survey Private sector Median Public services Median All Median 2009 survey Private sector Median Public services Median

1–49 50–249 250–999* 1,000–4,999 More than 5,000 All organisations

3 12 45 110 200 20

3 12 50 150 500 20

1 10 30 55 150 30

3 12 46 100 550 20

3 10 45 100 850 20

2 14 50 100 500 80 10 60 300 800 30 10 52 300 800 20 8* 70 300 550 100

Base: 577 (2011); 442 (2010); 683 (2009)
*The categories for number of permanent staff employed in the UK differed slightly in the 2009 survey (250 or fewer; 251–500,
501–1,000, 1,001–5,000, 5,001–10,000, 10,001+). 2009 categories have been combined where appropriate and otherwise matched with
the best corresponding category of 2011/2010.

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2011

Overall, nearly three-quarters (73%) of permanent vacancies were filled with external candidates. Larger organisations, with a wide range of talent to choose from, are more likely to recruit internally than smaller organisations.3 Public sector organisations, particularly those with more than 1,000 UK employees, are more likely to recruit internally than the private sector (Table 3).
4

Organisations are divided in their use of temporary contracts. More than a quarter (28%) have employed more people on temporary contracts in 2010 compared with the previous year, while a similar proportion (27%) have employed fewer people on temporary contracts (45% remain the same). Manufacturing and production organisations are most likely to have increased their use of temporary contracts and the public services the least, perhaps reflecting their reduced recruitment generally (Figure 1).5

Table 3: Average percentage of job vacancies filled internally
No. of permanent staff employed in UK Private sector Mean Public services Mean Voluntary, community and notfor-profit Mean All Mean

1–49 50–249 250–999* 1,000–4,999 More than 5,000 All organisations
Base: 533

15 20 24 35 47 25

17 28 29 58 62 45

7 23 24 12 33 19

13 21 24 39 53 27

figure 1: Use of temporary contracts, by sector in 2010, compared with the previous year (%)

Manufacturing and production Private sector services Public services Voluntary, community and not-for-profit More
Base: 610

37 23 31 28 32

38 50

25 27 37

RESOURCING AND TALENT PLANNING 2011

50

22

Same

Less

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RESOURCING AND TALENT PLANNING

Sector-specific experience is an essential requirement of candidates in three-fifths (60%) of organisations overall. While our figures suggest it is less commonly required in the public sector (48% compared with 59% of the voluntary, community and not-for-profit sector and 63% of the private sector),6 there are also substantial differences within sectors. For example, specific sector experience is essential for the majority of organisations operating in the chemical, construction or mining industries and professional services, but not for those in general manufacturing or retail and wholesale. Similarly, within the public sector it is deemed particularly essential for health and education organisations but less so for those in central or local government.

One in six organisations (17%) report they are employing more 16–24-year-olds compared with one year ago; this compares with less than one in eight (12%) who are employing fewer young people (72% are employing the same number). The employment of younger workers has reduced most in the public sector, where one in four reports a decrease compared with one in ten who reports an increase (Table 4).7 This is likely to reflect a general reduction in recruitment in this sector. Overall, one-quarter of organisations expect the abolition of the Default Retirement Age will mean they recruit fewer people; however, the figure rises to nearly half of public sector organisations. It does not appear, however, that the abolition of the Default Retirement Age will have a particular impact on the recruitment of young people, with only one in ten organisations reporting it will result in fewer 16–24-year-olds being recruited (Table 4).

Employing younger workers
Figures from the Office for National Statistics show that while total unemployment fell during the three months to February 2011, youth unemployment rose to a record level of almost 1 million, equating to one in five economically active 16–24-year-olds out of work. Moreover, concerns have been raised as to whether high youth unemployment will be further compounded by the abolition of the Default Retirement Age later this year and the increase in university tuition fees. This year we included new questions in the survey to explore these issues.

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Table 4: The employment of younger workers (%)
All respondents Percentage employing fewer 16–24-year-olds than one year ago Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer 16–24-year-olds Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer people
Base: 605

Manufacturing and production 10

Private sector services 9

Public services 25

Voluntary, community and not-for-profit 10

12

11

18

6

17

9

23

25

15

48

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2011

Graduate recruitment
Two-fifths of organisations (39%) are concerned that the increase in university tuition fees will have an impact on the number of graduates in the marketplace. Public sector organisations are particularly concerned (49% compared with 34% of private sector services, 42% of not-for-profits and 43% of manufacturing and production organisations).8 Perhaps in order to address this deficit, or in response to additional government support to boost apprenticeship schemes, a third of public sector organisations, nearly half of manufacturing and production and about a quarter of private sector services and not-for-profit organisations are considering increasing apprenticeship schemes (Table 5). About a quarter of organisations overall are considering increasing their use of internships, although the proportion is markedly lower in the public sector. Overall, one in ten organisations are considering sponsoring students through university, Overall, just over a quarter of organisations operate a structured graduate recruitment programme (Table 6). The operation of these programmes is significantly related to organisation size (Figure 2).10 They also appear to be most common in the manufacturing and production sector, as last year when a step increase in their use was noted (Table 6). It appears that this sector is investing in the development of skills to address their deficit in the workforce generally. As in previous years voluntary, community and not-for-profit organisations are least likely to operate a structured graduate recruitment programme.11 but the proportion doubles in manufacturing and production, where the lack of appropriate skills is a common cause of recruitment difficulties (Table 5; see also Tables 8 and 9). Larger organisations are also more likely to consider sponsoring students through university (19% of those with more than 5,000 employees).9

Table 5: Activities organisations are considering (%)
All respondents Increasing apprenticeship schemes Increasing your use of internships Sponsoring students through university
Base: 615

Manufacturing and production 48

Private sector services 24

Public services 33

Voluntary, community and not-for-profit 27 27 1

30

22 10

27 20

23 8

12 12

RESOURCING AND TALENT PLANNING 2011

Table 6: Organisations operating a structured graduate recruitment programme, by sector (%)
2011 All 27 2010 34 2009 22 2008 23

Sector Manufacturing and production Private sector services Voluntary, community and not-for-profit Public services
Base: 614 (2011); 472 (2010); 752 (2009)

35 29 6 26

35 37 18 33

23 24 5 23

24 27 7 24

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RESOURCING AND TALENT PLANNING

The majority of respondents from organisations without a recruitment programme for graduates report that their organisation has never had such a programme or not had one for some time (97%). Even in the cash-strapped public sector, only 3% report they have closed their graduate recruitment programme in the last 12 months. Nearly a third (31%) of organisations who have a graduate recruitment programme have increased their intake over the past year, while a quarter have reduced their intake (24%). This shows an improvement on the previous year at the height of the recession, when 43% had reduced their intake. The impact of the budget cuts in the public sector are, however, clearly apparent as more than twice as many organisations in this sector (50% compared with 20% in the private and not-for-profit sectors) have reduced their graduate intake.

Length of recruitment process
One in three (31%) organisations report that the length of their recruitment process has led to the loss of potential recruits. This issue appears to be exacerbated by organisation size. Nearly half of organisations with more than 5,000 employees report that the length of their recruitment process has led to the loss of potential recruits, compared with 38% of those in organisations of 250–999 employees and just 15% of organisations with fewer than 50 employees.12 There are no significant sector differences.

Recruitment difficulties
Three-quarters of organisations with vacancies report difficulties in filling at least some over the past few months (75%). This is an increase on last year (2010: 68%) and may reflect the decrease in unemployment in the first few months of 2011. It is less, however, than in previous years, perhaps because organisations were attempting to fill fewer vacancies (2009: 81%; 2008: 86%).

figure 2: Organisations operating a structured graduate recruitment programme, by size (%)

Number of
UK employees
Fewer than 50
9 17 16 21 29 39 42 47 61 62

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50–249

250–999

1,000–4,999

More than 5,000 0 10 2011 20 2010
30 40 Percentage 50 60

70

80

Base: 609 (2011); 466 (2010)

2011

The private sector, particularly manufacturing and production organisations, are most likely to have difficulties filling vacancies (Table 7).13 Table 8 shows that over half of organisations in this sector have difficulty filling technical vacancies and this may reflect specific skills shortages in the UK. The most difficult category of staff to recruit in other sectors is managers and professionals/specialists, as was the case last year. In general, there is little change in the categories of vacancies that are most difficult to recruit for compared with last year. As would be expected, given the cuts to public sector budgets, one in ten public sector organisations report they did not have any vacancies to fill, twice as many as last year. There is little change in this regard in the other sectors. Table 9 shows the reasons respondents cite for their recruitment difficulties. The findings are similar to previous years. Lack of necessary specialist or technical skills remains by far the most frequently cited cause of difficulties, reported by nearly three-quarters of respondents (2011: 72%; 2010: 67%; 2009: 73%; 2008: 70%). This is particularly an issue for the manufacturing and production sector and the public services sector, where there is a particularly high demand for such skills. Lack of formal qualifications is far less of an issue. These findings support arguments for greater The proportion reporting their recruitment problems are due to potential candidates’ reluctance to move in the current economic climate has decreased from just over a quarter in 2010 to 19% this year. Economic growth, albeit slow, is likely to be responsible for this reduction but the ‘hangover’ of the recession is highlighted as one in five organisations still blame the economic climate for their recruitment problems. Despite high unemployment, 15% of respondents report they have experienced problems due to no applicants. In line with last year’s findings, this is particularly an issue for the public sector (22%), which is also more likely to report the image of their sector/occupation is a problem (22%). Higher pay expectations than the organisation could offer and lack of experience are the next most frequently cited causes of recruitment problems (46% and 40% respectively). Interestingly, these are less of an issue in the public sector, perhaps because public sector applicants have different expectations of pay or because some pay scales are set at a national level. Lack of experience may be less of an issue than the necessary skills or qualifications required in many public sector roles. collaboration between industry and academic institutions and more vocational training in order to meet organisations’ skill requirements.

RESOURCING AND TALENT PLANNING 2011

Table 7: Organisations experiencing difficulties recruiting for one or more category of vacancy, by organisation size (% of those that have had vacancies to fill)
Manufacturing and production 88 Private sector services 77 Voluntary, community and not-for-profit 62 38

All 2011 Difficulty filling one or more vacancies No difficulties experienced
Base: 561

Public services 66

75

25

12

23

34

13

RESOURCING AND TALENT PLANNING

Table 8: Categories of vacancy that proved particularly difficult to fill (% of respondents)
Manufacturing and production Private sector services Voluntary, community and not-forprofit

All 2011

Public services

All 2010

Other managers and professionals/specialists Technical Senior managers/ directors Services (customer, personal, protective and sales) Administrative, secretarial Manual/craft workers Other No difficulties experienced No vacancies to fill
Base: 597 (2011); 468 (2010)

34 30 14 7 4 4 6 23 6

41 53 13 6 3 11 5 12 3

33 29 16 8 4 3 3 22 7

27 20 10 3 4 1 10 30 10

34 16 16 5 4 0 11 38 1

37 28 16 5 3 2 4 25 6

Table 9: Reasons for recruitment difficulties (%)
Manufacturing and production Private sector services Voluntary, community and not-forprofit

All 2011 Lack of necessary specialist or technical skills Look for more pay than you could offer Lack of experience Reluctance to move in current economic climate Lack of interpersonal skills No applicants Image of sector/ occupation/organisation Relocation difficulties Lack of formal qualifications The impact of the immigration cap* Other
Base: 427 (2011); 330 (2010) *new item introduced in 2011

Public services

All 2010

72 46 40 19 16 15 13 9 7
3 4

82 47 42 24 9 9 7 19 7
2 3

69 48 43 18 19 16 12 6 7
4 3

80 34 27 17 10 22 22 10 5
3 8

59 52 41 15 20 20 11 7 7
4 7

67 39 36 26 12 15 12 8 4

14

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2011

Improving the employer brand
Nearly three-quarters of organisations have made efforts to improve their employer brand over the past year (Table 10). The larger the organisation, the more likely it is to have undertaken one or more activities to improve its brand. Two-fifths of small organisations with fewer than 50 employees report they have taken no action to improve their employer brand compared with one-quarter of organisations with 250–999 employees and onesixth of those with more than 5,000 employees. There are no significant sector differences. The most popular approaches to improving employer brand are employee surveys and developing online careers sites, with larger organisations most likely to have adopted these methods. The public sector is most likely to
14

Attracting candidates
The effectiveness of methods to attract applicants varies according to sector and organisation size (Table 11). Overall, the most effective method is through organisations’ own corporate websites, as was the case last year. The effectiveness of this method increases with organisation size, probably due to the increased brand awareness and perhaps because larger organisations have more advanced websites.18 The private sector, particularly manufacturing and production organisations, is three times more likely than public sector organisations to report recruitment agencies among their most effective methods and twice as likely as voluntary sector organisations (regardless of size). Search consultants and employee referral schemes are also notably more popular in the private sector than in the public or voluntary sectors. In contrast, the public and voluntary sectors are more likely to find the press effective for attracting applicants, including local and national newspaper advertisements and specialist journals/trade press. Secondments are also deemed to be more effective in these sectors than in the private sector.

have introduced or extended flexible working/ homeworking, whereas the private sector is
15

more likely to have made efforts to improve its brand through working with charities or corporate sponsorship.16 Voluntary, community and not-for­ profit organisations are most likely to have used placement students to improve their brand.17

Table 10: Work undertaken over last year to improve employer brand (%)
All 2011 Employee surveys Developing online careers site Introducing/extending flexible working/ homeworking Placement students Graduate careers fairs Working with charities Corporate sponsorship Introducing sabbaticals Other No action taken to improve employer brand
Base: 601

Private sector 39

Public services 38

Voluntary, community and not-for-profit 43 29 29

RESOURCING AND TALENT PLANNING 2011

39

30 24 23 15 14 11 3 7 27

33 20 21 17 16 13 4 6 28

23 39 19 11 8 2 1 6 29

35 8 6 8 5 10 22

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RESOURCING AND TALENT PLANNING

Table 11: Most effective methods for attracting applications, by industry sector (%)
Sector 2011 Voluntary, community and not-for-profit Manufacturing and production Public services Private sector services Number of UK employees 2011 1,000–4,999 More than 5,000

Own corporate website Recruitment agencies Local newspaper advertisements Employee referral scheme Commercial job boards Specialist journals/trade press Encourage speculative applications/word of mouth Jobcentre Plus Professional networking (such as LinkedIn) Search consultants Links with schools/colleges/universities Apprenticeships National newspaper advertisements Secondments Links with other local organisations making redundancies* Alumni (previous employees) Social networking sites (such as Facebook) Local Employment Partnership (LEP) Other
Base: 604 (2011); 464 (2010)
*new item introduced in 2011

63 60 36 35 33 31 24 23 14 22 18 12 16 11

59 54 32 29 27 27 25 25 16 15 13 11 11 11 7

44 77 38 33 33 24 30 24 11 24 16 19 4 7 13 6 4 1 2

57 62 23 38 29 23 29 24 23 17 13 9 6 8 5 7 5 4 3

77 22 41 5 14 30 9 22 5 5 9 13 23 21 7 2 3 2 12

66 30 51 14 29 43 23 34 9 4 17 9 29 12 9 1 4 5 6

42 39 28 20 21 26 27 16 28 14 12 10 10 2 6 7 3 1 8

55 59 35 33 27 23 31 29 13 11 13 10 9 9 5 2 2 2 3

57 66 35 27 25 32 23 21 13 17 11 11 15 13 9 6 2 3 4

250–999

All 2010

All 2011

50–249

1–49

77 51 29 32 42 32 19 25 18 18 18 12 10 11 11 11 8 4 4

79 41 29 29 26 24 19 32 17 15 15 17 15 19 8 3 12 9 5

5 3 6 5

5 4 3 5

16

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Despite the popularity of social networking sites such as Facebook, they are not seen to be particularly effective for attracting candidates. Professional networking sites, such as LinkedIn, are more popular, particularly in the private services sector, although there has only been a small percentage increase in their reported effectiveness compared with last year.

2011

Recruitment partners
A new question this year asked respondents if their attitude to and relationships with recruitment partners has changed over the past 12 months. Just over a third report things have not changed (Table 12). A similar proportion report they have reduced their use of recruitment partners and 6% that they have stopped using them altogether, with one in ten considering them an unaffordable expense (one in five in the not-for-profit sector) and a similar proportion an unnecessary expense. In contrast, one in five (predominantly private sector organisations) report they have formed a closer business partnership with recruitment partners over the past year and one in ten (again predominantly private sector organisations) report they consider them integral to attracting top talent. Tests for specific job-related skills are more popular in the public and not-for-profit sectors (61% and 62% respectively compared with 43% in the private sector), whereas telephone interviews are more popular in the private sector (52% compared with 12% in the public sector and 26% in the not-for­ profit sector).

Selecting candidates
There has been little change in the methods used to select candidates over the past few years, with the exception of a drop in the use of general ability tests compared with 2009 (Table 13). Interviews remain the most common selection method with competency-based interviews being most popular overall. Interviews following the contents of CVs/application forms are also particularly popular in the private sector (70% compared with 41% in the public sector and 57% in the not-for-profit sector), whereas the public and not-for-profit sectors favour structured (panel) interviews (82% and 79% respectively compared with 45% in the private sector).

Table 12: Changes in attitudes to and relationships with recruitment partners over the past 12 months (%)
All 2011 Not changed Reduced use of recruitment partners Formed a closer business partnership with them Consider them an unnecessary expense Consider them an unaffordable expense Consider them integral to attracting top talent Stopped using recruitment partners Other
Base: 604

Private sector 34

Public services 40

Voluntary, community and not-for-profit 39 26 12

36

32 19 12 11 9 6 3

34 23 11 10 11 5 3

32 8 13 11 2 8 3

RESOURCING AND TALENT PLANNING 2011

16 22 4 5 3

17

RESOURCING AND TALENT PLANNING

Table 13: Methods used to select applicants (%)
2011 survey Competency-based interviews Interviews following contents of CV/application form Structured interviews (panel) Tests for specific job-related skills Telephone interviews Literacy and/or numeracy tests Personality/aptitude/psychometric questionnaires Assessment centres Pre-application elimination/progression question(s) General ability tests Group exercises (for example role-playing) Pre-interview references (academic or employment) Video CVs Other
Base: 605 (2011); 473 (2010); 754 (2009)

2010 survey 78

2009 survey 69

70

63 56 49 43 38 35 35 25 23 21 9 0 3

64 61 48 47 43 44 42 32 27 30 16 1 4

68 59 50 38 39 35 35 N/A 44 26 19 N/A 6

Strengths-based recruitment
Two-fifths of organisations (40%) report they use a strengths-based approach to recruitment, although it is less commonly used in the public sector (26%).19 In all sectors, smaller organisations are most likely to report they use a strengths-based approach (60% of organisations with 1–49 employees use it compared with 34% of organisations with 250–999 employees and 24% of organisations with more than 5,000 employees).20

Many organisations that use a strengths-based approach to recruitment also use a strengths-based approach for other people processes. More than half use it for performance management processes (59%), succession planning (55%) and learning and development (53%). Two-fifths use it for talent management (42%) and a third use it for workforce planning (32%). Just under three in ten (29%) also use it for redeployment.

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Recruitment costs
Most of those who use a strengths-based approach to recruitment are neutral about how easy it is to administer in practice, regardless of sector or size. Nearly a third (32%) find it easy or very easy and only one in ten (11%) find it difficult. Over three-quarters of those who use a strengthsbased approach to recruitment believe it brings benefits in terms of increased individual performance (78%). Two-thirds believe it improves retention (67%) and increases engagement (63%). Two-fifths (39%) report it results in greater diversity of skills in the workplace. Four-fifths (79%) of organisations that calculate recruitment costs provided cost estimates per hire. There is considerable variance in the amount organisations spend (at least partly due to our Last year we noted an increase in the proportion of organisations that calculate their recruitment costs (2010: 65%; 2009: 53%; 2008: 51%). This year, the proportion is back in line with previous years (52%). The increase last year may have been due to sampling differences or a consequence of an increased focus on costs during the recession that has not continued.

2011

findings that organisations include different costs in their calculations, see Table 14). In general the median figures (Table 15) are lower than last year for both senior manager/directors and other employees. In order to explore the validity of estimates, this year we also asked respondents to indicate how accurate their cost estimates were. Half (51%) of estimates for costs of recruiting senior managers/ directors were accurate to plus or minus 10% and 83% to plus or minus 20%. Two-fifths of estimates for other employees were accurate to plus or minus 10% and 74% to plus or minus 20%. Table 16 shows the median figures for estimates that were believed to be accurate to up to plus or minus 20%. The figures indicate, as we found last year, that organisations spend considerably more on senior appointments than on other employees. This reflects the value attached to good leadership and perhaps the additional challenges of attracting the best candidates for senior positions. This is particularly the case in the private sector, where considerably more is spent on the recruitment of senior managers/directors than in the public or notfor-profit sectors. Table 14: Criteria included in cost per hire calculations (%)
Size – number of employees in UK %

Advertising costs Agency/search costs Employee referrals Travel expenses Relocation expenses Fixed costs of resourcing team Opportunity costs of hiring managers' time Other Don't know
Base: 299

81 75 35 30 17 24 24 3 4

Table 15: Estimated total costs (advertising costs, agency or search fees) per hire (£)
Median 2011 (no. of respondents) Median 2010 (no. of respondents)

Occupational group Senior managers/directors Other employees

Minimum

Maximum

RESOURCING AND TALENT PLANNING 2011

7,000 (219) 2,000 (246)

251 150

55,000 32,000

8,333 (234)
2,930 (262)

Number of respondents shown in brackets

Table 16: Median total costs (advertising costs, agency or search fees) per hire for estimates accurate to plus or minus 20% (£)
Manufacturing and production Voluntary, community and not-forprofit

Occupational group Senior managers/directors Other employees
Base: 150

Median 2011

Private sector

Public services

7,500 2,500

8,000 3,400

9,000 2,000

5,000 3,000

3,500
1,500

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RESOURCING AND TALENT PLANNING

2 RESOURCING AND TALENT mANAGEmENT IN TURBULENT TImES
In January 2010 the UK officially emerged from the recession; however, the economic environment remains uncertain for many organisations. The environmental disasters in Japan, the uprisings and wars in the Middle East, rising oil prices and European debt highlight the volatility of global markets. In the UK, economic growth remains sluggish and there are concerns regarding the impact of the VAT increases, high inflation and the austerity measures of the Coalition Government. This section examines the impact of the economic environment on resourcing budgets, strategies and activities in 2010. It looks at changes in views on the employment market and the implications for managing talent.

The impact of the economic climate on resourcing
Overall, half of organisations report that the economic climate has had a negative impact on their organisations’ resourcing budgets for 2011–12 (Table 17). This year, however, it is the public sector that is most severely hit, with four-fifths (82%) reporting their resourcing budgets will be reduced (up from 59% last year). In contrast, fewer private and not-for-profit sector organisations face reductions this year compared with last, although more are still reducing their budgets than increasing them.

Changes in resourcing and talent practices in 2011 compared with 2010 reflect a stronger focus on costs and reductions in budgets (Figure 3). Two-thirds plan to develop more talent in­ house (compared with one-third in 2010) and more organisations plan to reduce reliance on recruitment agencies and external consultants for resourcing and development. The proportion of organisations planning to focus more on retaining rather than recruiting talent has increased to 51% in 2011 from 28% in 2010.

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2011

Changes in recruitment practices are also anticipated. More organisations plan to make use of new media/technology to recruit, which may be a cost-cutting strategy but can also improve the efficiency and effectiveness of the recruitment process. On a positive note more organisations plan to invest more time and effort in the quality of candidates they hire and will be taking actions to improve ways of identifying quality candidates. Public sector organisations are more than twice as likely to be implementing a recruitment freeze in 2011 (46% compared with 22% overall). Nevertheless, this is an improvement on 2010, when 58% of public sector organisations implemented a recruitment freeze. The situation is also somewhat brighter for many private sector organisations, with 15% reporting they will be implementing a recruitment freeze in 2011 compared with 26% in 2010. Nevertheless, the economic recovery remains slow for many, with 29% of private sector organisations and 66% of public sector organisations reporting they will be reducing the number of new recruits they hire in 2011, similar proportions to 2010. Inevitably more public than private sector organisations report they will be reducing their headcount in 2011 and losing key talent (33% compared with 9% in the private sector) and redeploying people into new roles (66% compared with 37% in the private sector).

Table 17: Impact of the current economic climate on organisations’ resourcing budgets (%)
All Private sector Public services Voluntary, community and not-for-profit

2011
Reduced Stayed about the same Increased Don't know

2010 53 37 7 3

2011 41 39 11 8

2010 51 40 4 5

2011 82 14 1 3

2010 59 36 5

2011 51 40 4 5

2010 61 34 5

49 36 8 7

Base: 615 (2011); 475 (2010)

21

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RESOURCING AND TALENT PLANNING

figure 3: Resourcing and talent practices implemented in 2011 and 2010 (% of respondents)

Developing more talent in-house Continuing to recruit key talent/niche areas Focusing more on retaining rather than recruiting talent Reducing reliance on recruitment agencies Use of new media/technology to recruit Investing more time and effort in the quality of candidates we hire Redeploying people into new roles Reducing the number of new recruits we hire Taking actions to improve ways of identifying quality candidates Increasing the number of interim/contract staff recruited Reducing our use of external consultants for resourcing and development Increased recruitment of apprentices/interns Implementing a recruitment freeze Reducing our headcount but preserving key talent Recruiting talent discarded by competitors Reducing our headcount and losing key talent Offering sabbaticals, career breaks, additional holidays Reducing employees' working hours to avoid making people redundant Reducing graduate recruitment
8 8 6 7 11
16
18
12
15 23 19 24
22 22
30 29 28 28 26 30 28

36 46 51 36 47 46 45 44 35 35 35 59

66

13
12
12 10 12 10

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Suspending graduate recruitment 0

10 2011

20 2010

30 40 50 Percentage of respondents

60

70

80

Base: 582

2011

Views on the employment market
In little change to last year, three-quarters of organisations report they have noticed an increase in the number of unsuitable applicants as they have fewer roles to fill (Figure 4). Far fewer (34%) report that there are too many suitable candidates to choose from and, despite high unemployment over the past two years, more than half (52%) believe that competition for talent is even greater as the pool of available talent to hire has fallen sharply (2010: 41%; 2009: 20%). For many organisations there appears a clear mismatch between the skills they require and those available in the labour market. Competition for talent appears to be particularly keen in the private sector. Two-thirds (64%) of manufacturing and production organisations Three-fifths (62%) of respondents agree that the demand for temporary and contract workers will increase as employers will be reluctant to take on permanent staff during uncertain times, while 44% agree that part-time workers will become more appealing to employers who are looking to cut costs. and 55% of private services organisations agree that competition for talent is even greater now, compared with 39% of the public sector and 34% of not-for-profits.21 In contrast, the public sector and not-for-profits are more likely to agree they have too many suitable candidates to choose from (61% and 47% respectively compared with 23% of manufacturing and production and 27% of private sector services).22

figure 4: Views on the employment market (% agreeing or strongly agreeing)

With fewer roles to fill we have noticed an increase in the number of unsuitable applicants. The demand for temporary and contract workers will increase as employers will be reluctant to take on permanent staff during uncertain times. Employers will use the economic downturn as an opportunity to get rid of poor performers and bring about culture change. Competition for talent is even greater now as the pool of available talent to hire has fallen sharply. Part-time workers will become more appealing to employers who are looking to cut costs. Employers are acting too hastily in making people redundant and as a result they will lose too many employees with valuable knowledge and skills. With fewer roles to fill there are now too many suitable candidates to choose between.* The abolition of the Default Retirement Age will mean we recruit fewer people.* Employers will look to make older workers over the age of 65 redundant before their younger workers. 0 2011 10
19 22 27 23 34 32

73 76 54 62 66 66 55 63 72 52 41 20 44 45 52 44 48 53

RESOURCING AND TALENT PLANNING 2011

20 2010

30 40 50 Percentage of respondents 2009

60

70

80

Base: 607 (2011); 475 (2010); 746 (2009) *item added 2010/2011

23

RESOURCING AND TALENT PLANNING

More than half of respondents (55%) across all sectors believe that employers will use the economic downturn as an opportunity to get rid of poor performers and bring about culture change. While high, this shows a downward trend on the past two years (2010: 63%; 2009: 72% agree or strongly agree), perhaps reflecting a slowing in the number of redundancies. Similarly there is a gradual downward trend in the proportion of respondents who express concern that employers are acting too hastily in making people redundant and as a result they will lose too many employees with valuable knowledge and skills or that employers will look to make older workers over the age of 65 redundant before their younger workers. Nearly a quarter (23%) of respondents believe that the abolition of the Default Retirement Age will mean they recruit fewer people (48% in the public sector).
23

Implications for talent management
The value of effective talent management has not been lost in the recent attention on reducing costs. Two-fifths (41%) of organisations report that the current economic situation has led to an increased focus on talent management (43% in 2010) and only 4% that it has led to a decreased focus (7% in 2010) with no significant differences across sectors. Unsurprisingly, however, the public sector are about twice as likely this year to report they have reduced their overall talent management spend due to the downturn compared with other sectors (Table 18).24 The proportion of organisations that report the economic downturn has had an impact on approaches to reward across the business has slightly reduced compared with last year (54% compared with 61% in 2010). As last year, it appears that organisations across all sectors are being more selective in who they reward. A smaller proportion of organisations report their approach to reward for individuals identified as talent has been affected by the downturn (42%) than report their approach to reward across the business has been affected (54%).

Table 18: Has your overall talent management spend been reduced due to the economic downturn? (%)
All 2011 Yes No N/A (no talent management spend)
Base: 617 (2011); 471 (2010)

Private sector

Public sector

Voluntary, community and not-for-profit

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All 2010

18 38 44

17 43 40

32 16 52

13 32 55

23 41 36

2011

Case study: Innovative recruitment and cost saving in the Association of Greater Manchester Authorities
The Association of Greater Manchester Authorities (AGMA) represents the ten local authorities in Greater Manchester and works in partnership with a wider group of associate councils and public sector organisations. AGMA chief executives and council leaders work together on a range of key strategic and policy issues which impact on Greater Manchester, including resourcing strategies and recruitment and retention issues. The AGMA initiative in cost reduction in the area of resourcing has been described as ‘a truly pioneering example of collaboration between a number of local authorities’ and is already delivering against a range of objectives. The initial aim was to make a significant saving on the £5–6 million annual cost of external media advertising reported in 2008–09 and to create a more efficient and effective recruitment system. A shared portal was commissioned to offer a front-end website (www.yourcounciljobs. co.uk) with a ‘back-office’ e-recruitment system, which would give a standardised, shared-service approach for job applicants across councils. Some of the benefits for applicants include the ability to go to one place to register their interest, to be able to look in specific categories for jobs of particular relevance to them, to be able to amend an existing application form in order to apply for a further post and to receive email alerts when new jobs relevant to their interests are posted. In addition, communications to job-seekers are now standardised for every council. This approach has seen real benefits across each of the local authorities; workflows are now standardised as every HR team runs identical systems and there is consistency in reporting within all councils, enabling them to benchmark their processes more clearly. The councils use this benchmarking data to make additional improvements and efficiencies. Jayne Whitehead, AGMA Category Procurement Manager, has project-managed the initiative with managers represented from each participating authority and describes the process as one of ‘true collaboration’, with ‘100% commitment’ from all the councils involved. The benefits are clear; annual media costs are dramatically reduced to approximately £250,000 across ten partner organisations and there has been a reduction in time-to-hire of 13 days. This has had the knock-on effect of reducing expenditure on agency staff. The average cost of a recruitment advertisement per role was previously £974.00; it is now £152.00. There have also been benefits outside the original intention, including doubling the number of online applications for council posts, with administrative cost savings in HR of approximately £250,000 across the consortium. More than 61,000 registered users are now on the system and the councils are successfully filling their own talent pools of prospective job-seekers. Overall, the project team is now celebrating a £1.7 million reduction in recruitment expenditure over the past 12 months. (continued)

25

RESOURCING AND TALENT PLANNING 2011

RESOURCING AND TALENT PLANNING

There were some challenges in the implementation of this new way of working. All the councils had to be convinced about the benefits of the changes. With the implementation of a new IT system having its own set of challenges, the project has taken 12 months to introduce, longer than first anticipated. Implementing the changes during a period of radical restructuring in all councils also proved particularly challenging. However, Jayne describes how both the need to make efficiencies and feedback from job-seekers meant that ‘we had to find a different way of doing things’. Jayne also recognises how the neutrality of her own role (each council pays a tenth of her salary) has been essential in ensuring that the project has been fair to all its participants, offering a centralised shared resource to manage the project. The project is now set to develop yet further with the aim of becoming entirely self-funding within the next year by accepting advertising from other organisations. Two new websites are planned for recruitment into schools and social care jobs, bringing even less reliance on media and agencies. AGMA will also be further building its own talent pool. Jayne describes the initiative as ‘a true example of what you can do if you collaborate across authorities’. Not only the separate councils but also diverse teams and functions including HR, IT, procurement, communications and marketing have worked together to deliver this innovative and inspiring project. Information provided by Jayne Whitehead, AGMA Category Procurement Manager

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2011

3 DIVERSITy
This section examines organisations’ approaches to diversity, including the use of formal diversity strategies and the methods used to address diversity issues.
Just over half of organisations report they have a formal diversity strategy, showing little change over the past four years (2011: 52%; 2010: 55%; 2009: 60%; 2008: 55%). Consistent with previous years’ findings, most public sector organisations (90%) have a formal diversity strategy, compared with just under two-thirds of not-for-profit organisations and just two-fifths of private sector companies (Table 19).25 Diversity strategies are also more common in larger organisations (regardless of sector).26

Table 19: Does your organisation have a formal diversity strategy? (%)
Yes All 52 No 41 Don't know 7

Sector Private sector Public services Voluntary, community and not-for-profit

41 90 63

50 9 33

8 1 4

RESOURCING AND TALENT PLANNING 2011

Number of UK employees Fewer than 50 50–249 250–999 1,000–4,999 More than 5,000
Base: 613

45 43 48 65 80

50 51 44 31 9

5 6 7 4 11

27

RESOURCING AND TALENT PLANNING

As was the case last year, over three-quarters of organisations with a formal diversity policy attempt to address diversity issues through monitoring recruitment and/or staffing information to obtain data on gender, ethnicity, disability, age, and so on (Table 20). Less than three-fifths train interviewers to understand what diversity is about and the impact of stereotypes. Other diversity-focused initiatives are even less common; moreover, the figures indicate a reduction in the use of several methods compared with previous years. The pressures of the recession may have led to a reduced focus on diversity. Given the links between diversity in the workforce and productivity, organisations that fail to give this issue the attention it requires may find themselves at a disadvantage in the future.

Traditionally, the public sector has tended to lead the way in terms of diversity practices. Again this year they are significantly more likely to address diversity issues through monitoring recruitment and/or staffing information; through providing recruitment documents in other formats; through advertising vacancies in different sources to attract under-represented groups; and through setting recruitment targets to correct a workforce imbalance. Nevertheless they are less likely than other sectors to actively try to attract talent of all ages (Table 20). Moreover, our figures indicate that the reduction in the use of several diversity methods compared with previous years is particularly pronounced in the public sector. The change of government and budget reduction measures have led to significant change programmes in many public sector organisations, which may have resulted in a reduced focus on diversity issues.

Table 20: Methods used to address diversity issues in organisations (% with formal diversity strategy)
Voluntary, community and notfor-profit 2011 (2010)

2011 survey Monitoring recruitment and/or staffing information to obtain data on gender, ethnicity, disability, age, any other categories Training interviewers to understand what diversity is about and the impact of stereotypes Actively trying to attract talent of all ages* Operating policies that go beyond basic legislative requirements on age, gender, race, disability, sexual orientation, religion and belief Providing recruitment documents in other formats (online, large-print, audio, and so on) Checking that any tests used are valid, reliable and culture-free and were tested on diverse norm groups Advertising vacancies in different sources to attract under-represented groups Using specific images/words in your recruitment advertising to appeal to a wider audience Making attempts to employ the long-term unemployed* Setting recruitment targets to correct a workforce imbalance
Base: 312 (2011); 253 (2010); 419 (2009) *new item added in 2011

2010 survey

2009 survey

2008 survey

Private sector 2011 (2010)

Public services 2011 (2010)

78

79

84

83

70 (71)

88 (96)

88 (76)

57 45 39 39 36 31 29 19 9

68

68

60

53 (66) 53

64 (73) 32 47 (63) 64 (77) 35 (45) 44 (53) 36 (52) 13 18 (31)

57 (72) 43 47 (40) 47 (52) 27 (16) 41 (32) 33 (40) 29 8 (16)

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49 41 42 37 38

52 37 47 51 42

48 31 34 48 42

34 (44) 24 (22) 39 (44) 22 (30) 25 (30) 19

15

14

12

4 (8)

2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27,000 in the three months to the end of January 2011 to 2.53 million, the highest since 1994. When unemployment is high the number of employees leaving organisations voluntarily is expected to decrease. Here we examine whether this is happening and how organisations are tackling the issue of employee retention.
Among organisations that are able to supply turnover data, the median labour turnover rate has decreased over the past few years (Table 21). The median figure, however, hides differences across organisations. Slightly more organisations report their turnover has increased in 2010 compared with 2009 (38%) than has decreased (33%), while for nearly a third (29%) it remained the same. Smaller organisations are more likely to report their labour turnover has increased and larger organisations that it has decreased.
27

the private sector compared with last year but decreased in the voluntary and public services sector. This reflects improvements in the economic outlook for the private sector and the widespread cuts in the public sector, which also have a direct impact on many not-for-profit organisations that provide services for the public sector.

Cost of labour turnover
While just over half of organisations calculate their recruitment costs, only 13% calculate the cost of their labour turnover (2010: 14%). The majority of organisations report they do not calculate these costs (79%), while 7% don’t know if they are calculated or not. Nearly half (46%) of those who calculate their turnover costs want to maintain their current turnover rate, while one-fifth (38%) want to reduce turnover during 2011 and 15% want to increase it.

As in previous years, the majority of turnover (53%) is still attributed to employees leaving voluntarily (Table 22). As the economy has improved the median proportion of turnover due to redundancies has reduced. Only 12% of organisations that provided reasons for leaving made more than ten redundancies in the previous year compared with 33% in 2010, 26% in 2009 and 22% in 2008. A third (34%) of organisations that made redundancies offered career transition services.

RESOURCING AND TALENT PLANNING 2011

Retaining employees
While median turnover rates have reduced across all sectors, Table 23 shows that the rate of voluntary leavers has increased slightly in The steps organisations take to retain employees in their workforce can have a significant impact on organisational efficiency and success through

29

RESOURCING AND TALENT PLANNING

Table 21: Median rate of labour turnover (%)
2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

12.5
Base: 175 (2011)

13.5

15.7

17.3

18.1

18.3

Table 22: Median labour turnover rates, by reason for leaving (%)
2011 survey Voluntary redundancies Compulsory redundancies Dismissed/left involuntarily (including death in service) Fixed-/short-term contracts Retired Left voluntarily
Base: 154 (2011)

2010 survey

2009 survey

0 0 0.7 0 0
6.6

0 1.0 0.9 0 0.4
8.4

0 0.5 1.4 0.7 0.7
9.0

Table 23: Median labour turnover rates, by industry sector (%)
Sector 2011 survey Manufacturing and production Private sector services Public services Voluntary, community, not-for-profit
Number of respondents shown in brackets

All leavers 2010 survey 2009 survey 2011 survey

Voluntary leavers 2010 survey 2009 survey

9.3 (38) 13.8 (96) 8.5 (28) 13.1 (11)

12.4 (44) 14.6 (77) 8.6 (19) 15.9 (15)

15.3 (80) 16.8 (150) 12.6 (52) 16.4 (38)

3.7 (35) 8.7 (82) 3.4 (10) 7.0 (24)

2.7 (42) 5.8 (15) 10.2 (18)

7.7 (75) 7.6 (45) 11.0 (35)

7.4 (71) 10.4 (129)

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decreasing employee turnover, loss of talent and recruitment and training costs, while having a positive impact on motivation, job satisfaction and the employer brand. Only two-fifths (42%) of organisations experienced no difficulties in retaining staff during 2010. This figure is similar to last year (45%) but higher than the findings for 2008, when 31% reported they had no retention difficulties. These findings reflect the increased caution of employees regarding leaving their

jobs during times of economic uncertainty and high unemployment. Supporting this are our findings that the public (49%) and not-for-profit sectors (49%) are more likely to report they had no difficulties in retaining staff during 2010 compared with the private sector (38%). As in previous years, organisations most commonly have difficulty retaining managers and professionals/specialists (Table 24). The manufacturing and production sector are most likely to report difficulties retaining technical

2011

staff and the private services sector that they have most difficulty retaining services staff. This may reflect the higher demand for these categories of employees in these sectors. While most organisations have taken one or more steps to address staff retention, nearly one in four organisations (23%) report that no specific retention initiatives were undertaken. This is a similar proportion to last year, although substantially higher than in previous years when retention difficulties were more common due to a tighter labour market (Table 25). Public sector organisations are twice as likely not to have taken any steps to address retention as those in the private or not for-profit sectors (39% compared with 20% of private sector and 16% of not-for-profits).28 The most common methods used to address retention in 2010, used by nearly two-fifths of organisations, are to improve line managers’ people skills, improve learning and development opportunities and improve the induction process. Improving line managers’ people skills and learning and development opportunities are also most commonly rated among the top three most effective retention methods. The effectiveness of improving induction processes is more varied, with 22% rating it among the top three most effective methods and 12% among the top three least effective methods. Views are also mixed regarding the effectiveness of improved pay. It is likely that employees are motivated by different factors. Employers need to provide a healthy working environment where employees are treated with respect and make efforts to match their retention initiatives with what staff want.

Table 24: Retention difficulties, by occupational category (%)
Private sector services Voluntary, community and not-forprofit

All 2011 Managers and professionals/ specialists Technical Services (customer, personal, protective and sales) Administrative, secretarial Senior managers/directors Manual/craft workers
Base: 601 (2011); 451 (2010)

Manufacturing and production

Public services

All 2010

28 21 13 9 7 6

26 37 7 5 5 11

29 19 21 8 8 6

25 17 4 15 10 3

29 13 4 13 6 4

27 20 12 7 9 4

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RESOURCING AND TALENT PLANNING 2011

RESOURCING AND TALENT PLANNING

Table 25: Steps taken specifically to address staff retention (%)
Used in 2010 Improved line managers' people skills Increased learning and development opportunities Improved induction process Improved employee involvement Improved selection techniques Improved pay Offered coaching/mentoring/ buddy systems Improved benefits Better promotion to employees of the employer brand Created clearer career paths Revised the way staff are rewarded so their efforts are better recognised Made changes to improve work– life balance Improved physical working conditions Redesigned jobs to make them more satisfying Increased our use of counter­ offers* No specific initiatives undertaken
* new item added in 2011

Least effective

Most effective

Used in 2009

Used in 2008

Used in 2007

39 38 38 34 30 27 24 21 18 18 18 17 15 11 4 23

7 5 12 8 7 11 8 8 10 6 4 5 8 4 4 3

31 34 22 24 25 23 14 14 5 2 13 13 7 8 14 1

42 35 31 32 31 22 20 19 15 21 14 19 13 13

39 47 45 35 42 42 24 32 21 18 19 31 19 18

37 46 45 29 46 53 22 36 16 17 19 30 12 14

27

13

9

Base: 559 (2011 survey); 431 (2010 survey); 695 (2009 survey); 710 (2008 survey)

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2011

CONCLUSIONS
Looking forward
In January 2010 the UK officially emerged from the longest recession since the 1930s. Economic growth, however, remains sluggish and the public sector has embarked on a four-year programme of the biggest government spending cuts in decades to address the fiscal deficit. In the labour market, unemployment remained high throughout 2010. Figures from the Office for National Statistics (ONS) show that UK unemployment rose by 27,000 in the three months to the end of January 2011 to 2.53 million, the highest since 1994. While recent months have seen signs of improvement, there are concerns that the slow growth in the private sector will be unable to fully compensate for the increasing job losses in the public sector that will result from the budget cuts. This is supported by the findings from the CIPD’s spring 2011 Labour Market Outlook, which shows the impact on the overall labour market of a slight rise in private sector recruitment is still being cancelled out by large-scale public sector job losses. The findings of the CIPD’s 2011 Resourcing and Talent Planning survey reflect the challenges of the economic environment. Organisations generally have increased their focus on costs. On average, organisations spent less on filling each vacancy and a fifth have reduced their resourcing budgets and talent management spend. In the public sector the focus on costs and budget reductions was particularly apparent. The end of the recession has meant fewer redundancies in 2010. Nevertheless, over a third of public sector and one-fifth of private sector organisations reduced their headcount. The Our findings do not present a positive outlook for the vast number of unemployed. A substantial proportion of organisations reports that the already low number of vacancies available to them is likely to be further affected by the abolition of the Default Retirement Age. Yet despite the high unemployment rate, most organisations reported difficulties in filling vacancies, mostly due to skill shortages. We have also seen an increase in the proportion of organisations reporting that competition for talent is even greater as the pool of available talent to hire has fallen sharply. For many organisations there appears a clear mismatch between the skills they require and those available in the labour market. Some are concerned this will be exacerbated by the increase in university tuition fees. Some are responding Looking forward, private sector growth is expected to remain slow and the full impact of public sector budget cuts is still to come. Resourcing and talent management budgets will be further hit in 2011–12 and many public sector organisations will implement recruitment freezes and reduce graduate intake and recruitment generally. Resourcing and talent practices are changing to reflect the stronger focus on costs and reductions in budgets. Particularly in the public sector, but also in the private sector, trends indicate a greater focus on developing talent in-house, retaining rather than recruiting talent and reducing reliance on recruitment agencies and external consultants for resourcing and development. number of vacancies on offer by organisations remained as low as in 2009 overall and continued to decrease in very large organisations, particularly in the public sector.

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by increasing apprenticeship schemes, internships and sponsoring students through university. Such schemes may be aided by the Government’s recently announced £60 million commitment to help boost youth employment and provide extra support for apprenticeships and changes to vocational training and education. How far this will go towards meeting organisations’ skill requirements remains to be seen. On a positive note our findings indicate that talent management is viewed as more, not less, important in difficult times, although with reduced budgets, organisations will have to be innovative with their approach and strategies. In order to survive organisations will need to make certain they focus beyond the cost-cutting required in the current environment to ensuring their talent strategies are aligned to long-term business success. The CIPD’s Shaping the Future and Next Generation HR flagship projects have both explored the important issues of sustainability. Shaping the Future in particular warns against the dangers of ‘talent tunnel vision’ taking a short-sighted view on talent strategies which are solely focused on the needs of the here and now. Often organisations pay too little attention to identifying and developing the capabilities that individuals will need in the long term. This implies a leadership/talent management capability gap with too much focus on the operational needs of today rather than the organisational imperatives of tomorrow. It’s never too late to start equipping your people with the skills and knowledge they need to meet both present and future challenges. So what practical recommendations can we make for resourcing and talent professionals, drawn from our Shaping the Future evidence?

Audit your organisation’s current skills and future capabilities
If you haven’t done so already, conduct a thorough inventory of your organisation’s current skills and map those against the capabilities you are likely to need in the future. Hold forecasting sessions which look at macro and micro trends, how these will impact your way of working and the changes that will be required for future success.

Build your talent and succession pipeline
You also need to be proactively building up your talent pipelines (horizontally and vertically), so that you are developing people with future-fit skills and capabilities. A silver lining from the current economic climate is that more organisations are focusing on developing internal talent and fully utilising the skills of their existing workforce. Fresh talent is still important but recruitment strategies should complement internal pipelines.

Maintain a continuous focus on capabilitybuilding
Capability-building should be part of a continuous process, embedded into policies and practices. Across our case study organisations, managers talked about the need to embed development and skills training as part of business as usual, rather than as a one-off activity.

Develop a creative approach to skills and capability development
Even when budgets are tight, it is essential that staff get the development they need to ensure they have the capabilities for their current job role, as well as starting to build those that the organisation will need in the future. Our case study organisations were focusing strongly on knowledge-sharing, enabling people to learn from others across the organisation. Many of you are already considering alternative solutions for specialist skill development, such as apprenticeships, internal management schemes, summer placements and internships. It is also important to work with universities to ensure that graduates are developing skills and knowledge which will help them to succeed in the workplace.

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BACkGROUND TO ThE SURVEy
This survey was conducted in March and April 2011. It was sent to a sample of UK-based HR professionals in the public, private and voluntary sectors. In total, 626 people responded to the survey.
This is the fifteenth annual CIPD Resourcing and Talent Planning survey (formerly known as the CIPD’s Recruitment, Retention and Turnover survey). The survey examines organisations’ resourcing and talent planning strategies and practices and the key challenges and issues they face. The survey consists of 45 questions completed through an online self-completion questionnaire. The majority of questions remain the same as previous years, to provide useful benchmark data on topics including recruitment practices, difficulties and costs, selection methods, diversity strategies, the impact of the economic climate on resourcing and talent planning practices, labour turnover and retention strategies. New question areas this year examine the employment of younger workers, the length of the recruitment process, the nature of job vacancies, relationships with recruitment partners and the use of strengths-based approaches to recruitment. A small number of respondents took part in followup telephone interviews to produce mini case studies on a selection of topics. These are presented in the coloured boxes throughout the report.

Sample profile
Respondents predominantly work for private sector organisations, with professional services being particularly well represented, but other sectors are represented in similar proportions to last year (Table A1).

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Table A1: Breakdown of respondent organisations, by industrial sector
Number of respondents

% 19 0 1 1 1 6 3 1 1 1 0 3 52 13 5 4 4 0 1 7 4 1 13 16 2 2 4 4 5 13 1 5 3 3

Manufacturing and production Agriculture and forestry Chemicals, oils and pharmaceuticals Construction Electricity, gas and water Engineering, electronics and metals Food, drink and tobacco General manufacturing Mining and quarrying Paper and printing Textiles Other manufacturing/production Private sector services Professional services (accountancy, advertising, consultancy, legal, etc) Finance, insurance and real estate Hotels, catering and leisure IT services Call centres Media (broadcasting and publishing, etc) Retail and wholesale Transport, distribution and storage Communications Other private services Public services Central government Education Health Local government Other public services Non-profit organisations Care services Charity services Housing association Other voluntary
Base: 610

113 1 9 8 4 38 18 6 4 6 2 17 319 78 33 26 26 3 7 40 23 6 77 100 14 12 23 22 29 78 9 32 17 20

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Most respondents work in small to medium-sized organisations, in terms of the number of UKbased employees, but larger organisations are also represented in similar proportions to last year (Table A2). Respondents reported on organisations based across the UK. Three in ten responded for the whole of the UK, while others responded for a particular region/country (see Table A3).

Labour turnover
A total of 175 survey respondents were able to supply all the information necessary for us to calculate labour turnover on a whole-organisation basis. This report uses the standard ‘crude wastage’ method to calculate the rate of turnover. This method is calculated as follows: Labour turnover = Number of leavers in a set period

Table A2: Breakdown of sample by organisation size – permanent employees in the UK % Fewer than 10 10–49 50–249 250–999 1,000–4,999 More than 5,000
Base: 610

______________________________________ x 100 Average number employed in the same period (Leavers include those leaving the organisation by way of voluntary or involuntary severance, redundancies or retirements, but does not include internal transfers). Readers should be aware that this method has some shortcomings. For example, it takes no account of the characteristics of the workforce or the length of service of the leaver.

5 12 33 25 12 13

Table A3: Main region covered by the reply % East Anglia East Midlands West Midlands North-east of England North-west of England South-west of England Yorkshire and Humberside South-east of England (excluding London) London Scotland Wales Northern Ireland Ireland Whole of UK
Base: 602

Note on statistics and figures used
Some respondents did not answer all questions, so where percentages are reported in tables or figures, the respondent ‘base’ for that question is given. ‘Average’ in the report is used to refer to the statistical mean where the data is normally distributed. However, the median is used in cases where the distribution is significantly skewed. When the median is used it is noted. With the exception of labour turnover rates, all figures in tables have been rounded to the nearest percentage point. Due to rounding, percentages may not always total 100. Chi-square (χ2) tests are used to examine whether differences between groups such as industrial sectors are significant or likely to be due to chance. Spearman’s Rho correlation (Rho) is used to examine relationships between variables. We report on statistics at the generally accepted level of significance, p<0.05. 5 3 5 3 7 6 5

RESOURCING AND TALENT PLANNING 2011

12 12 6 3 3 0 29

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fURThER SOURCES Of INfORmATION
We produce a range of free factsheets, surveys, guides and research reports which are available on the CIPD website at cipd.co.uk/hrresources

Workforce planning
Our guide Workforce Planning: Right people, right time, right skills (2010) gives advice on developing workforce planning processes.

Read our factsheets on:
Employer Brand Employee Turnover and Retention Induction

Diversity
Two survey reports and a guide provide practical advice and information on trends: Diversity in Business: A focus for progress (2007). Managing an Ageing Workforce: How employers are adapting to an older labour market (2010). Managing Age: New edition 2011. Two further reports are available to order from cipd.co.uk/bookstore: Managing Diversity in Practice: Supporting business goals (2007) Managing Diversity and the Business Case (2008)

Outlook series
Our quarterly reports Labour Market Outlook and Employee Outlook look at the employer and employee perspectives on the labour market and on workplace issues and trends, while HR Outlook explores priorities and emerging trends for the HR profession and function. View these reports at: cipd.co.uk/research/outlook-series

Talent management
Two reports look at talent issues in a recession/ difficult economic climate: The War on Talent? Talent management under
threat in uncertain times (2009).
Fighting Back through Talent Innovation (2010).
Opening up Talent for Business Success (2010) looks at the importance of integrating talent management and diversity. The Talent Perspective: What does it feel like to be talent-managed? (2010) looks at the employee view of talent management.

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2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and individuals who gave their time to take part in this research. They include:
• Annette Sinclair, Senior Researcher at Roffey

Park, for analysing the findings and writing this comprehensive report.
• Members of the Recruitment Forum Steering

Committee for their input into the survey design and assistance in piloting the questionnaire.
• Hays for their support and commitment at

every stage of the research.
• All those who shared examples of their

organisation’s practices. We hope that you find the research useful when considering your own recruitment and retention practices. Please contact us if you have any questions or ideas based on our findings (research@cipd.co.uk).

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fOOTNOTES
1 2 3 4 5 6 7 8 9 10 11 12 13 14

Chi Square = 57.3, df = 5, p < 0.001, n = 604
Rho = 0.73, p < 0.001, n = 577
Rho = 0.45, p < 0.001, n = 533
F = 25.0, df = 2, p < 0.001, n = 533
Chi Square = 18.0, df = 6, p < 0.01, n = 535
Chi Square = 7.1, df = 2, p < 0.05, n = 603
Chi Square = 23.0, df = 6, p < 0.01, n = 600
Chi Square = 9.1, df = 3, p < 0.05, n = 598
Chi Square = 12.9, df = 4, p < 0.05, n = 610
Rho = 0.34, p < 0.001, n = 609
Chi square = 21.7, df = 3, p < 0.001, n = 609
Chi Square = 60.9, df = 8, p < 0.001, n = 607
Chi Square = 20.8, df = 3, p < 0.001, n = 560
Size of organisation and developing online
careers site: Rho = 0.25, p < 0.001, n = 599; Size of
organisation and employee surveys: Rho = 0.19,
p < 0.001, n = 599

16

Working with charities: Chi Square = 8.0, df = 2, p
< 0.05, n = 599; corporate sponsorship: Chi Square
= 11.6, df = 2, p < 0.01, n = 599

17 18

Chi Square = 7.6, df = 2, p < 0.05, n = 599
Table 11 also shows that this method is deemed most effective by public sector organisations but this effect is due to a greater proportion of large public sector organisations in our sample, whereas private sector organisations are more evenly distributed in size.

19 20 21 22 22 22 22 22 22 22

Chi square = 10.9, df = 2, p < 0.01, n = 610
Chi Square = 27.9, df = 4, p < 0.001, n = 610
Chi Square = 25.9 df = 6, p < 0.001, n = 598
Chi Square = 51.5, df = 6, p < 0.001, n = 597
Chi Square = 17.7, df = 8, p < 0.05, n = 600
Chi Square = 33.9, df = 4, p < 0.001, n = 610
Chi Square = 82.0, df = 4, p < 0.001, n = 610
Chi Square = 52.2, df = 8, p < 0.001, n = 610
Rho = 0.24, p < 0.001, n = 195
Chi Square = 16.6, df = 2, p < 0.001, n = 544

15

Chi Square = 16.7, df = 2, p < 0.001, n = 599

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Issued: June 2011 Reference: 5552 © Chartered Institute of Personnel and Development 2011

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