Recruitment and retention is nothing new, but why is it more than important than ever?

In my opinion, you can never have enough insight about a sector and the businesses operating within it. Our bi-monthly Rethinking the Economy survey does just that. It delves deeper into the current issues affecting mid-sized businesses and allows us to take a closer look at regions, sectors, and sizes of businesses to understand the pressures and priorities facing them at any one time.

The latest survey is no different. Faced with a plethora of questions that reflect the ever-changing economic climate, we can gauge the mood and intentions of manufacturers – not just in the Midlands, but across the UK.

It’s no surprise that the conversation centres around the ever-present COVID-19, record levels of inflations, growing interest rates, the cost of living crisis, and the growing prospect of a recession, amongst many other things. The other common thread that’s been weaving its way through the manufacturing sector for more than 10 years is the issue of skills, recruitment and retention.

It's by no means a new topic, but it’s the reasons why we continue to talk about it that change – and, in the current climate, change at pace. Recruitment and retention go hand in hand, like fish and chips! You simply can’t have one without the other. So, while manufacturers are grappling with the issue of finding the right people with the right skills, they’re also having to address the problem of keeping hold of good talent – why? There are a multitude of reasons, but supporting staff through the cost of living crisis is certainly one of them.

According to our Rethinking the Economy survey, half of manufacturers are providing other benefits in kind, such as shopping vouchers, childcare support, free travel or meals while at work, in order to help their workforce through the crisis, with 46% providing one-off bonuses. But it doesn’t end there. The added benefits are also supported by salary increases, with more than half of manufacturers increasing, or intending to increase salaries by 4% to 8% in the face of excruciating pressures.

With that kind of intent, it’s little wonder that 57% of manufacturers are very confident about the effectiveness of their pay and reward strategy, regarding retention and attracting staff. By updating their strategy, in response to the strong economic headwinds, or having an existing strategy that’s fit for purpose, means a significant number of manufacturers are positively positioned when it concerns pay and reward. However, this isn’t the case for everyone and, for a number, the issue is simply not on the agenda, due to the pressures being felt elsewhere.

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While the job of keeping hold of staff is a difficult one, so too is finding them. Employers have struggled to fill roles over the last few months, particularly for skilled workers in the sector. As such, vacancies are at an all-time high, in part because the labour force has shrunk since 2020. Our own Rethinking the Economy survey mirrors this, with one in five manufacturers admitting that their immediate priority for the next six months is trying to grow their workforce, with 37% of manufacturers stating that they’re struggling to find talent with the right skills.

Recruitment and retention is an age-old problem, but the circumstances around it are evolving, and without action and change, the sector faces a serious threat to its future.

If you’d would like to discuss the latest Rethinking the Economy survey, and the issues raised, contact me on [email protected] or call 07970 115322. Alternatively, you can find out more about building a resilient and more cost-effective workforce through our webinar series here https://www.bdo.co.uk/en-gb/download-workforce-resilience-webinar