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2011 RESOURCING AND TALENT PLANNING Annual survey report 2011 in partnership with

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2011RESOURCING AND TALENT PLANNING

Annual survey report 2011

in partnership with

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2011

CONTENTS

Foreword 2

Summary of key findings 4

1 Recruiting employees 7

2 Resourcing and talent management in turbulent times 20

3 Diversity 27

4 Managing labour turnover 29

Conclusions 33

Background to the survey 35

Further sources of information 38

Acknowledgements 39

Footnotes 40

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2

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 ndash which we hope you will find useful ndash

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 yearrsquos 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

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

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

Julie Waddicor

Managing Director Hays Human Resources the

leading recruiting expert

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3

2011

ABOUT US Chartered Institute of Personnel and Development

The Chartered Institute of Personnel and

Development (CIPD) is Europersquos largest HR and

development professional body As a globally

recognised brand with over 135000 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

We offer

bull membership

bull professional development including

qualifications and training

bull networking opportunities and world-class

events

bull expertise in HR capability-building and

consultancy services

bull topical insights and analysis

bull a wealth of resources and a voice for HR

cipdcouk

Hays

Hays is the worldrsquos leading recruiting expert in

qualified professional and skilled work It employs

over 7000 staff in 257 offices across 30 countries Last

year Hays placed around 50000 people in permanent

jobs and nearly 180000 in temporary positions

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-forshy

profit sectors

Its recruiting experts deal with 150000 CVs every

month and more than 50000 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 personrsquos life

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4

RESOURCING AND TALENT PLANNING

SUmmARy Of kEy fINDINGS

The CIPDrsquos 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 organisationsrsquo 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 bull Just over half of survey participants report

having a formal resourcing strategy

bull Larger organisations are most likely to have a

resourcing strategy

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

organisations attempted to fill in 2010 remains

as low as in 2009 during the recession

bull The number of vacancies in very large

organisations particularly in the public sector

has dramatically reduced over the past three

years

bull Three-quarters of permanent vacancies were

filled with external candidates

bull Three-fifths of organisations require candidates

to have specific sector experience

bull 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)

Graduate recruitment bull Two-fifths of organisations are concerned that

the increase in university tuition fees will have

an impact on the number of graduates in the

marketplace

bull One in ten organisations are considering

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)

bull Just over a quarter of organisations operate a

structured graduate recruitment programme

(35 of manufacturing and production)

bull Few organisations have closed graduate

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-forshy

profit sectors)

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5

2011 Recruitment difficulties bull One in three organisations report the length of

their recruitment process has led to the loss of

potential recruits

bull Three-quarters of organisations experienced

recruitment difficulties in the past few months

bull Managers and professionals and technical

positions are the most difficult vacancies to fill

bull As in previous years the main reason for

recruitment difficulties is a lack of necessary

specialist or technical skills

bull Nearly three-quarters of organisations had made

efforts to improve their employee brand over

the last year most commonly through employee

surveys and developing online career sites

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

applicants varies according to organisation sector

and size the most effective method overall

is reported to be through organisationsrsquo own

corporate websites as was the case last year

bull 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

bull Overall a third of organisations report they

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

bull Competency-based interviews (70) interviews

following the contents of CVsapplication forms

(63) and structured interviews (56) are as

last year the most common methods used to

select applicants

bull Two-fifths of organisations report they use

a strengths-based approach to recruitment

although it is less commonly used in the public

sector (26)

bull The median recruitment cost of filling a vacancy

is pound7500 for senior managersdirectors and pound2500

for other employees (adjusting for accuracy)

showing reductions compared with last year

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

economic climate has had a negative impact

on their organisationsrsquo resourcing budgets for

2011ndash12 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)

bull Changes in resourcing and talent practices in

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

bull Nearly half of public sector organisations will

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

bull The volume of applicants for vacancies has

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)

bull Most organisations remain focused on

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

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6

RESOURCING AND TALENT PLANNING

Diversity bull Overall in little change from previous years

just over half of organisations have a diversity

strategy rising to 90 of public sector

organisations

bull Our figures indicate a reduction in the use of

several methods to address diversity issues this

year particularly in the public sector which has

traditionally led the way in diversity practice

Labour turnover bull The median labour turnover rate has decreased

over the past few years (2011 125 2010

135 2009 157 2008 173)

bull Smaller organisations are most likely to report

that their labour turnover has increased and

larger organisations that it has decreased

bull 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 growthcuts in the

respective sectors

bull The proportion of organisations making ten

or more redundancies over the past year has

reduced from 33 in 2009 to 12 in 2010

Employee retention bull Only two-fifths (42) of organisations

experienced no difficulties in retaining staff

during 2010 a similar figure to the previous

year Managers and professionalsspecialists and

technical employees remain the most difficult

categories of staff to retain

bull Most organisations have taken one or more

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

bull The most frequently cited actions taken by

employers to address retention ndash improving

the people management skills of line managers

and increased learning and development

opportunities ndash 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

2011

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

Table 1 Organisations with formal resourcing strategies in place by size ()

Size ndash number of employees in UK 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

Fewer than 10 26

10ndash49 38

50ndash249 46

250ndash999 55

1000ndash4999 68

More than 5000 85

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Base 604

7

8

RESOURCING AND TALENT PLANNING

The number and nature of job vacancies There is considerable variation in the number

of vacancies respondentsrsquo organisations tried

to fill in 2010 partly because the number of

vacancies is strongly related to organisation size

(Table 2)2 Overall the median number of vacancies

has fallen from 30 in 2008 to 20 over the past two

years as the recession affected increasing numbers

of organisations (Table 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

(5000+ 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

Table 2 Median number of vacancies respondents tried to fill by size of organisation and sector

2011 survey 2010 survey 2009 survey

No of permanent staff employed in UK All Private

sector Public

services All Private sector

Public services All Private

sector Public

services

Median Median Median Median Median Median Median Median Median

1ndash49 3 3 1 3 3 2

50ndash249 12 12 10 12 10 14 10 10 8

250ndash999 45 50 30 46 45 50 60 52 70

1000ndash4999 110 150 55 100 100 100 300 300 300

More than 5000 200 500 150 550 850 500 800 800 550

All organisations 20 20 30 20 20 80 30 20 100 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 251ndash500

501ndash1000 1001ndash5000 5001ndash10000 10001+) 2009 categories have been combined where appropriate and otherwise matched with

the best corresponding category of 20112010

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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 organisations3 Public sector

organisations particularly those with more than

1000 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

Voluntary No of permanent staff community and not-employed in UK Private sector Public services for-profit All

Mean Mean Mean Mean

1ndash49 15 17 7 13

50ndash249 20 28 23 21

250ndash999 24 29 24 24

1000ndash4999 35 58 12 39

More than 5000 47 62 33 53

All organisations 25 45 19 27 Base 533

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 Same Less

Base 610

25

27

37

22

3837

50

32

50

23

31

28

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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

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

16ndash24-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

One in six organisations (17) report they are

employing more 16ndash24-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 16ndash24-year-olds being recruited (Table 4)

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Table 4 The employment of younger workers ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Percentage employing fewer 16ndash24-year-olds than one year ago

Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer 16ndash24-year-olds

Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer people

12 10 9 25 10

11 18 6 17 9

23 25 15 48 22

Base 605

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

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

5000 employees)9

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 programme11

Table 5 Activities organisations are considering ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Increasing apprenticeship schemes 30 48 24 33 27

Increasing your use of internships 22 27 23 12 27

Sponsoring students through university 10 20 8 12 1

Base 615

Table 6 Organisations operating a structured graduate recruitment programme by sector ()

2011 2010 2009 2008

All 27 34 22 23

Sector

Manufacturing and production 35 35 23 24

Private sector services 29 37 24 27

Voluntary community and not-for-profit 6 18 5 7

Public services 26 33 23 24

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Base 614 (2011) 472 (2010) 752 (2009)

11

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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 5000 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 250ndash999

employees and just 15 of organisations with

fewer than 50 employees12 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

39

42

9Fewer than 50

17

1650ndash249

21

29 250ndash999

1000ndash4999 47

61 More than 5000

62

10 40 50 60 70 80

2011

0 3020 Percentage

2010

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 professionalsspecialists

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

collaboration between industry and academic

institutions and more vocational training in order

to meet organisationsrsquo skill requirements

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

The proportion reporting their recruitment

problems are due to potential candidatesrsquo

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

lsquohangoverrsquo 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 yearrsquos findings this is particularly an

issue for the public sector (22) which is also more

likely to report the image of their sectoroccupation

is a problem (22)

Table 7 Organisations experiencing difficulties recruiting for one or more category of vacancy by organisation size ( of those that have had vacancies to fill)

Voluntary Manufacturing community

and Private sector and All 2011 production services Public services not-for-profit

Difficulty filling one or 75 88 77 66 62more vacancies

No difficulties experienced 25 12 23 34 38

Base 561

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RESOURCING AND TALENT PLANNING

Table 8 Categories of vacancy that proved particularly difficult to fill ( of respondents)

Voluntary community

Manufacturing Private and and sector Public not-for-

All 2011 production services services profit All 2010

Other managers and professionalsspecialists

34 41 33 27 34 37

Technical 30 53 29 20 16 28

Senior managers directors

14 13 16 10 16 16

Services (customer personal protective 7 6 8 3 5 5 and sales)

Administrative secretarial

4 3 4 4 4 3

Manualcraft workers 4 11 3 1 0 2

Other 6 5 3 10 11 4

No difficulties experienced

23 12 22 30 38 25

No vacancies to fill 6 3 7 10 1 6 Base 597 (2011) 468 (2010)

Voluntary community

Manufacturing Private and All and sector Public not-for- All

2011 production services services profit 2010

Table 9 Reasons for recruitment difficulties ()

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Lack of necessary specialist or technical skills 72 82 69 80 59 67

Look for more pay than you could offer 46 47 48 34 52 39

Lack of experience 40 42 43 27 41 36

Reluctance to move in current economic climate 19 24 18 17 15 26

Lack of interpersonal skills 16 9 19 10 20 12

No applicants 15 9 16 22 20 15

Image of sector occupationorganisation 13 7 12 22 11 12

Relocation difficulties 9 19 6 10 7 8

Lack of formal qualifications 7 7 7 5 7 4

The impact of the immigration cap 3 2 4 3 4

Other 4 3 3 8 7 7

Base 427 (2011) 330 (2010)

new item introduced in 2011

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 250ndash999 employees and one-

sixth of those with more than 5000 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

methods14 The public sector is most likely to

have introduced or extended flexible working

homeworking15 whereas the private sector is

more likely to have made efforts to improve its

brand through working with charities or corporate

sponsorship16 Voluntary community and not-forshy

profit organisations are most likely to have used

placement students to improve their brand17

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 organisationsrsquo 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 websites18

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 journalstrade press

Secondments are also deemed to be more effective

in these sectors than in the private sector

Table 10 Work undertaken over last year to improve employer brand ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Employee surveys 39 39 38 43

Developing online careers site 30 33 23 29

Introducingextending flexible working homeworking 24 20 39 29

Placement students 23 21 19 35

Graduate careers fairs 15 17 11 8

Working with charities 14 16 8 6

Corporate sponsorship 11 13 2 8

Introducing sabbaticals 3 4 1 5

Other 7 6 6 10

No action taken to improve employer brand 27 28 29 22

RESO

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Base 601

15

16

RESOURCING AND TALENT PLANNING

Table 11 Most effective methods for attracting applications by industry sector ()

Sector 2011 Number of UK employees 2011

All

2010

All

2011

Man

ufa

ctu

rin

gan

d p

rod

uct

ion

Priv

ate

sect

or

serv

ices

Pub

lic s

ervi

ces

Vo

lun

tary

co

mm

un

ity

and

no

t-fo

r-p

rofi

t

1ndash49

50ndash2

49

250ndash

999

100

0ndash4

999

Mo

re t

han

500

0

Own corporate website 63 59 44 57 77 66 42 55 57 77 79

Recruitment agencies 60 54 77 62 22 30 39 59 66 51 41

Local newspaper advertisements 36 32 38 23 41 51 28 35 35 29 29

Employee referral scheme 35 29 33 38 5 14 20 33 27 32 29

Commercial job boards 33 27 33 29 14 29 21 27 25 42 26

Specialist journalstrade press 31 27 24 23 30 43 26 23 32 32 24

Encourage speculative applicationsword of mouth 24 25 30 29 9 23 27 31 23 19 19

Jobcentre Plus 23 25 24 24 22 34 16 29 21 25 32

Professional networking (such as LinkedIn) 14 16 11 23 5 9 28 13 13 18 17

Search consultants 22 15 24 17 5 4 14 11 17 18 15

Links with schoolscollegesuniversities 18 13 16 13 9 17 12 13 11 18 15

Apprenticeships 12 11 19 9 13 9 10 10 11 12 17

National newspaper advertisements 16 11 4 6 23 29 10 9 15 10 15

Secondments 11 11 7 8 21 12 2 9 13 11 19

Links with other local organisations making redundancies 7 13 5 7 9 6 5 9 11 8

Alumni (previous employees) 5 5 6 7 2 1 7 2 6 11 3

Social networking sites (such as Facebook) 3 4 4 5 3 4 3 2 2 8 12

Local Employment Partnership (LEP) 6 3 1 4 2 5 1 2 3 4 9

Other 5 5 2 3 12 6 8 3 4 4 5

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Base 604 (2011) 464 (2010)

new item introduced in 2011

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

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 CVsapplication 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)

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-forshy

profit sector)

Table 12 Changes in attitudes to and relationships with recruitment partners over the past 12 months ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Not changed 36 34 40 39

Reduced use of recruitment partners 32 34 32 26

Formed a closer business partnership with them 19 23 8 12

Consider them an unnecessary expense 12 11 13 16

Consider them an unaffordable expense 11 10 11 22

Consider them integral to attracting top talent 9 11 2 4

Stopped using recruitment partners 6 5 8 5

Other 3 3 3 3 Base 604

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18

RESOURCING AND TALENT PLANNING

Table 13 Methods used to select applicants ()

2011 2010 2009 survey survey survey

Competency-based interviews 70 78 69

Interviews following contents of CVapplication form 63 64 68

Structured interviews (panel) 56 61 59

Tests for specific job-related skills 49 48 50

Telephone interviews 43 47 38

Literacy andor numeracy tests 38 43 39

Personalityaptitudepsychometric questionnaires 35 44 35

Assessment centres 35 42 35

Pre-application eliminationprogression question(s) 25 32 NA

General ability tests 23 27 44

Group exercises (for example role-playing) 21 30 26

Pre-interview references (academic or employment) 9 16 19

Video CVs 0 1 NA

Other 3 4 6

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Base 605 (2011) 473 (2010) 754 (2009)

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 1ndash49 employees use it

compared with 34 of organisations with 250ndash999

employees and 24 of organisations with more

than 5000 employees)20

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 strengths-

based 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

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

Recruitment costs 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

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

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 managerdirectors 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 managersdirectors than in the public or not-

for-profit sectors

Table 14 Criteria included in cost per hire calculations ()

Size ndash number of employees in UK

Advertising costs

Agencysearch costs

Employee referrals

Travel expenses

Relocation expenses

Fixed costs of resourcing team

Opportunity costs of hiring managers time

Other

Dont 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 (pound)

Median 2011 Median 2010 (no of (no of

Occupational group respondents) Minimum Maximum respondents)

Senior managersdirectors 7000 (219) 251 55000 8333 (234)

Other employees 2000 (246) 150 32000 2930 (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 (pound)

Voluntary

Median 2011 Manufacturing

and Private Public

community and not-for-

Occupational group production sector services profit

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Senior managersdirectors 7500 8000 9000 5000 3500

Other employees 2500 3400 2000 3000 1500 Base 150

19

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20

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 organisationsrsquo resourcing budgets for 2011ndash12

(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 inshy

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

2011 Changes in recruitment practices are also

anticipated More organisations plan to make use

of new mediatechnology 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 organisationsrsquo resourcing budgets ()

Private Public Voluntary community All sector services and not-for-profit

2011 2010 2011 2010 2011 2010 2011 2010

Reduced 49 53 41 51 82 59 51 61

Stayed about the same 36 37 39 40 14 36 40 34

Increased 8 7 11 4 1 5 4 5

Dont know 7 3 8 5 3 5 Base 615 (2011) 475 (2010)

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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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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25

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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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29

2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

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onne

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Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

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2011

CONTENTS

Foreword 2

Summary of key findings 4

1 Recruiting employees 7

2 Resourcing and talent management in turbulent times 20

3 Diversity 27

4 Managing labour turnover 29

Conclusions 33

Background to the survey 35

Further sources of information 38

Acknowledgements 39

Footnotes 40

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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 ndash which we hope you will find useful ndash

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 yearrsquos 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

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

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

Julie Waddicor

Managing Director Hays Human Resources the

leading recruiting expert

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2011

ABOUT US Chartered Institute of Personnel and Development

The Chartered Institute of Personnel and

Development (CIPD) is Europersquos largest HR and

development professional body As a globally

recognised brand with over 135000 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

We offer

bull membership

bull professional development including

qualifications and training

bull networking opportunities and world-class

events

bull expertise in HR capability-building and

consultancy services

bull topical insights and analysis

bull a wealth of resources and a voice for HR

cipdcouk

Hays

Hays is the worldrsquos leading recruiting expert in

qualified professional and skilled work It employs

over 7000 staff in 257 offices across 30 countries Last

year Hays placed around 50000 people in permanent

jobs and nearly 180000 in temporary positions

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-forshy

profit sectors

Its recruiting experts deal with 150000 CVs every

month and more than 50000 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 personrsquos life

wwwhayscouk

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RESOURCING AND TALENT PLANNING

SUmmARy Of kEy fINDINGS

The CIPDrsquos 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 organisationsrsquo 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 bull Just over half of survey participants report

having a formal resourcing strategy

bull Larger organisations are most likely to have a

resourcing strategy

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

organisations attempted to fill in 2010 remains

as low as in 2009 during the recession

bull The number of vacancies in very large

organisations particularly in the public sector

has dramatically reduced over the past three

years

bull Three-quarters of permanent vacancies were

filled with external candidates

bull Three-fifths of organisations require candidates

to have specific sector experience

bull 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)

Graduate recruitment bull Two-fifths of organisations are concerned that

the increase in university tuition fees will have

an impact on the number of graduates in the

marketplace

bull One in ten organisations are considering

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)

bull Just over a quarter of organisations operate a

structured graduate recruitment programme

(35 of manufacturing and production)

bull Few organisations have closed graduate

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-forshy

profit sectors)

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5

2011 Recruitment difficulties bull One in three organisations report the length of

their recruitment process has led to the loss of

potential recruits

bull Three-quarters of organisations experienced

recruitment difficulties in the past few months

bull Managers and professionals and technical

positions are the most difficult vacancies to fill

bull As in previous years the main reason for

recruitment difficulties is a lack of necessary

specialist or technical skills

bull Nearly three-quarters of organisations had made

efforts to improve their employee brand over

the last year most commonly through employee

surveys and developing online career sites

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

applicants varies according to organisation sector

and size the most effective method overall

is reported to be through organisationsrsquo own

corporate websites as was the case last year

bull 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

bull Overall a third of organisations report they

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

bull Competency-based interviews (70) interviews

following the contents of CVsapplication forms

(63) and structured interviews (56) are as

last year the most common methods used to

select applicants

bull Two-fifths of organisations report they use

a strengths-based approach to recruitment

although it is less commonly used in the public

sector (26)

bull The median recruitment cost of filling a vacancy

is pound7500 for senior managersdirectors and pound2500

for other employees (adjusting for accuracy)

showing reductions compared with last year

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

economic climate has had a negative impact

on their organisationsrsquo resourcing budgets for

2011ndash12 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)

bull Changes in resourcing and talent practices in

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

bull Nearly half of public sector organisations will

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

bull The volume of applicants for vacancies has

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)

bull Most organisations remain focused on

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

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RESOURCING AND TALENT PLANNING

Diversity bull Overall in little change from previous years

just over half of organisations have a diversity

strategy rising to 90 of public sector

organisations

bull Our figures indicate a reduction in the use of

several methods to address diversity issues this

year particularly in the public sector which has

traditionally led the way in diversity practice

Labour turnover bull The median labour turnover rate has decreased

over the past few years (2011 125 2010

135 2009 157 2008 173)

bull Smaller organisations are most likely to report

that their labour turnover has increased and

larger organisations that it has decreased

bull 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 growthcuts in the

respective sectors

bull The proportion of organisations making ten

or more redundancies over the past year has

reduced from 33 in 2009 to 12 in 2010

Employee retention bull Only two-fifths (42) of organisations

experienced no difficulties in retaining staff

during 2010 a similar figure to the previous

year Managers and professionalsspecialists and

technical employees remain the most difficult

categories of staff to retain

bull Most organisations have taken one or more

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

bull The most frequently cited actions taken by

employers to address retention ndash improving

the people management skills of line managers

and increased learning and development

opportunities ndash 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

2011

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

Table 1 Organisations with formal resourcing strategies in place by size ()

Size ndash number of employees in UK 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

Fewer than 10 26

10ndash49 38

50ndash249 46

250ndash999 55

1000ndash4999 68

More than 5000 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 respondentsrsquo organisations tried

to fill in 2010 partly because the number of

vacancies is strongly related to organisation size

(Table 2)2 Overall the median number of vacancies

has fallen from 30 in 2008 to 20 over the past two

years as the recession affected increasing numbers

of organisations (Table 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

(5000+ 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

Table 2 Median number of vacancies respondents tried to fill by size of organisation and sector

2011 survey 2010 survey 2009 survey

No of permanent staff employed in UK All Private

sector Public

services All Private sector

Public services All Private

sector Public

services

Median Median Median Median Median Median Median Median Median

1ndash49 3 3 1 3 3 2

50ndash249 12 12 10 12 10 14 10 10 8

250ndash999 45 50 30 46 45 50 60 52 70

1000ndash4999 110 150 55 100 100 100 300 300 300

More than 5000 200 500 150 550 850 500 800 800 550

All organisations 20 20 30 20 20 80 30 20 100 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 251ndash500

501ndash1000 1001ndash5000 5001ndash10000 10001+) 2009 categories have been combined where appropriate and otherwise matched with

the best corresponding category of 20112010

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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 organisations3 Public sector

organisations particularly those with more than

1000 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

Voluntary No of permanent staff community and not-employed in UK Private sector Public services for-profit All

Mean Mean Mean Mean

1ndash49 15 17 7 13

50ndash249 20 28 23 21

250ndash999 24 29 24 24

1000ndash4999 35 58 12 39

More than 5000 47 62 33 53

All organisations 25 45 19 27 Base 533

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 Same Less

Base 610

25

27

37

22

3837

50

32

50

23

31

28

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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

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

16ndash24-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

One in six organisations (17) report they are

employing more 16ndash24-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 16ndash24-year-olds being recruited (Table 4)

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Table 4 The employment of younger workers ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Percentage employing fewer 16ndash24-year-olds than one year ago

Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer 16ndash24-year-olds

Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer people

12 10 9 25 10

11 18 6 17 9

23 25 15 48 22

Base 605

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

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

5000 employees)9

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 programme11

Table 5 Activities organisations are considering ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Increasing apprenticeship schemes 30 48 24 33 27

Increasing your use of internships 22 27 23 12 27

Sponsoring students through university 10 20 8 12 1

Base 615

Table 6 Organisations operating a structured graduate recruitment programme by sector ()

2011 2010 2009 2008

All 27 34 22 23

Sector

Manufacturing and production 35 35 23 24

Private sector services 29 37 24 27

Voluntary community and not-for-profit 6 18 5 7

Public services 26 33 23 24

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Base 614 (2011) 472 (2010) 752 (2009)

11

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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 5000 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 250ndash999

employees and just 15 of organisations with

fewer than 50 employees12 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

39

42

9Fewer than 50

17

1650ndash249

21

29 250ndash999

1000ndash4999 47

61 More than 5000

62

10 40 50 60 70 80

2011

0 3020 Percentage

2010

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 professionalsspecialists

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

collaboration between industry and academic

institutions and more vocational training in order

to meet organisationsrsquo skill requirements

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

The proportion reporting their recruitment

problems are due to potential candidatesrsquo

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

lsquohangoverrsquo 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 yearrsquos findings this is particularly an

issue for the public sector (22) which is also more

likely to report the image of their sectoroccupation

is a problem (22)

Table 7 Organisations experiencing difficulties recruiting for one or more category of vacancy by organisation size ( of those that have had vacancies to fill)

Voluntary Manufacturing community

and Private sector and All 2011 production services Public services not-for-profit

Difficulty filling one or 75 88 77 66 62more vacancies

No difficulties experienced 25 12 23 34 38

Base 561

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RESOURCING AND TALENT PLANNING

Table 8 Categories of vacancy that proved particularly difficult to fill ( of respondents)

Voluntary community

Manufacturing Private and and sector Public not-for-

All 2011 production services services profit All 2010

Other managers and professionalsspecialists

34 41 33 27 34 37

Technical 30 53 29 20 16 28

Senior managers directors

14 13 16 10 16 16

Services (customer personal protective 7 6 8 3 5 5 and sales)

Administrative secretarial

4 3 4 4 4 3

Manualcraft workers 4 11 3 1 0 2

Other 6 5 3 10 11 4

No difficulties experienced

23 12 22 30 38 25

No vacancies to fill 6 3 7 10 1 6 Base 597 (2011) 468 (2010)

Voluntary community

Manufacturing Private and All and sector Public not-for- All

2011 production services services profit 2010

Table 9 Reasons for recruitment difficulties ()

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Lack of necessary specialist or technical skills 72 82 69 80 59 67

Look for more pay than you could offer 46 47 48 34 52 39

Lack of experience 40 42 43 27 41 36

Reluctance to move in current economic climate 19 24 18 17 15 26

Lack of interpersonal skills 16 9 19 10 20 12

No applicants 15 9 16 22 20 15

Image of sector occupationorganisation 13 7 12 22 11 12

Relocation difficulties 9 19 6 10 7 8

Lack of formal qualifications 7 7 7 5 7 4

The impact of the immigration cap 3 2 4 3 4

Other 4 3 3 8 7 7

Base 427 (2011) 330 (2010)

new item introduced in 2011

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 250ndash999 employees and one-

sixth of those with more than 5000 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

methods14 The public sector is most likely to

have introduced or extended flexible working

homeworking15 whereas the private sector is

more likely to have made efforts to improve its

brand through working with charities or corporate

sponsorship16 Voluntary community and not-forshy

profit organisations are most likely to have used

placement students to improve their brand17

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 organisationsrsquo 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 websites18

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 journalstrade press

Secondments are also deemed to be more effective

in these sectors than in the private sector

Table 10 Work undertaken over last year to improve employer brand ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Employee surveys 39 39 38 43

Developing online careers site 30 33 23 29

Introducingextending flexible working homeworking 24 20 39 29

Placement students 23 21 19 35

Graduate careers fairs 15 17 11 8

Working with charities 14 16 8 6

Corporate sponsorship 11 13 2 8

Introducing sabbaticals 3 4 1 5

Other 7 6 6 10

No action taken to improve employer brand 27 28 29 22

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15

16

RESOURCING AND TALENT PLANNING

Table 11 Most effective methods for attracting applications by industry sector ()

Sector 2011 Number of UK employees 2011

All

2010

All

2011

Man

ufa

ctu

rin

gan

d p

rod

uct

ion

Priv

ate

sect

or

serv

ices

Pub

lic s

ervi

ces

Vo

lun

tary

co

mm

un

ity

and

no

t-fo

r-p

rofi

t

1ndash49

50ndash2

49

250ndash

999

100

0ndash4

999

Mo

re t

han

500

0

Own corporate website 63 59 44 57 77 66 42 55 57 77 79

Recruitment agencies 60 54 77 62 22 30 39 59 66 51 41

Local newspaper advertisements 36 32 38 23 41 51 28 35 35 29 29

Employee referral scheme 35 29 33 38 5 14 20 33 27 32 29

Commercial job boards 33 27 33 29 14 29 21 27 25 42 26

Specialist journalstrade press 31 27 24 23 30 43 26 23 32 32 24

Encourage speculative applicationsword of mouth 24 25 30 29 9 23 27 31 23 19 19

Jobcentre Plus 23 25 24 24 22 34 16 29 21 25 32

Professional networking (such as LinkedIn) 14 16 11 23 5 9 28 13 13 18 17

Search consultants 22 15 24 17 5 4 14 11 17 18 15

Links with schoolscollegesuniversities 18 13 16 13 9 17 12 13 11 18 15

Apprenticeships 12 11 19 9 13 9 10 10 11 12 17

National newspaper advertisements 16 11 4 6 23 29 10 9 15 10 15

Secondments 11 11 7 8 21 12 2 9 13 11 19

Links with other local organisations making redundancies 7 13 5 7 9 6 5 9 11 8

Alumni (previous employees) 5 5 6 7 2 1 7 2 6 11 3

Social networking sites (such as Facebook) 3 4 4 5 3 4 3 2 2 8 12

Local Employment Partnership (LEP) 6 3 1 4 2 5 1 2 3 4 9

Other 5 5 2 3 12 6 8 3 4 4 5

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Base 604 (2011) 464 (2010)

new item introduced in 2011

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

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 CVsapplication 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)

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-forshy

profit sector)

Table 12 Changes in attitudes to and relationships with recruitment partners over the past 12 months ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Not changed 36 34 40 39

Reduced use of recruitment partners 32 34 32 26

Formed a closer business partnership with them 19 23 8 12

Consider them an unnecessary expense 12 11 13 16

Consider them an unaffordable expense 11 10 11 22

Consider them integral to attracting top talent 9 11 2 4

Stopped using recruitment partners 6 5 8 5

Other 3 3 3 3 Base 604

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RESOURCING AND TALENT PLANNING

Table 13 Methods used to select applicants ()

2011 2010 2009 survey survey survey

Competency-based interviews 70 78 69

Interviews following contents of CVapplication form 63 64 68

Structured interviews (panel) 56 61 59

Tests for specific job-related skills 49 48 50

Telephone interviews 43 47 38

Literacy andor numeracy tests 38 43 39

Personalityaptitudepsychometric questionnaires 35 44 35

Assessment centres 35 42 35

Pre-application eliminationprogression question(s) 25 32 NA

General ability tests 23 27 44

Group exercises (for example role-playing) 21 30 26

Pre-interview references (academic or employment) 9 16 19

Video CVs 0 1 NA

Other 3 4 6

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Base 605 (2011) 473 (2010) 754 (2009)

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 1ndash49 employees use it

compared with 34 of organisations with 250ndash999

employees and 24 of organisations with more

than 5000 employees)20

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 strengths-

based 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

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

Recruitment costs 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

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

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 managerdirectors 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 managersdirectors than in the public or not-

for-profit sectors

Table 14 Criteria included in cost per hire calculations ()

Size ndash number of employees in UK

Advertising costs

Agencysearch costs

Employee referrals

Travel expenses

Relocation expenses

Fixed costs of resourcing team

Opportunity costs of hiring managers time

Other

Dont 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 (pound)

Median 2011 Median 2010 (no of (no of

Occupational group respondents) Minimum Maximum respondents)

Senior managersdirectors 7000 (219) 251 55000 8333 (234)

Other employees 2000 (246) 150 32000 2930 (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 (pound)

Voluntary

Median 2011 Manufacturing

and Private Public

community and not-for-

Occupational group production sector services profit

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Senior managersdirectors 7500 8000 9000 5000 3500

Other employees 2500 3400 2000 3000 1500 Base 150

19

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20

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 organisationsrsquo resourcing budgets for 2011ndash12

(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 inshy

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

2011 Changes in recruitment practices are also

anticipated More organisations plan to make use

of new mediatechnology 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 organisationsrsquo resourcing budgets ()

Private Public Voluntary community All sector services and not-for-profit

2011 2010 2011 2010 2011 2010 2011 2010

Reduced 49 53 41 51 82 59 51 61

Stayed about the same 36 37 39 40 14 36 40 34

Increased 8 7 11 4 1 5 4 5

Dont know 7 3 8 5 3 5 Base 615 (2011) 475 (2010)

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22

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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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23

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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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25

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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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27

28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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29

2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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31

32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

cipd

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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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

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

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2

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 ndash which we hope you will find useful ndash

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 yearrsquos 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

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

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

Julie Waddicor

Managing Director Hays Human Resources the

leading recruiting expert

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2011

ABOUT US Chartered Institute of Personnel and Development

The Chartered Institute of Personnel and

Development (CIPD) is Europersquos largest HR and

development professional body As a globally

recognised brand with over 135000 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

We offer

bull membership

bull professional development including

qualifications and training

bull networking opportunities and world-class

events

bull expertise in HR capability-building and

consultancy services

bull topical insights and analysis

bull a wealth of resources and a voice for HR

cipdcouk

Hays

Hays is the worldrsquos leading recruiting expert in

qualified professional and skilled work It employs

over 7000 staff in 257 offices across 30 countries Last

year Hays placed around 50000 people in permanent

jobs and nearly 180000 in temporary positions

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-forshy

profit sectors

Its recruiting experts deal with 150000 CVs every

month and more than 50000 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 personrsquos life

wwwhayscouk

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4

RESOURCING AND TALENT PLANNING

SUmmARy Of kEy fINDINGS

The CIPDrsquos 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 organisationsrsquo 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 bull Just over half of survey participants report

having a formal resourcing strategy

bull Larger organisations are most likely to have a

resourcing strategy

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

organisations attempted to fill in 2010 remains

as low as in 2009 during the recession

bull The number of vacancies in very large

organisations particularly in the public sector

has dramatically reduced over the past three

years

bull Three-quarters of permanent vacancies were

filled with external candidates

bull Three-fifths of organisations require candidates

to have specific sector experience

bull 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)

Graduate recruitment bull Two-fifths of organisations are concerned that

the increase in university tuition fees will have

an impact on the number of graduates in the

marketplace

bull One in ten organisations are considering

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)

bull Just over a quarter of organisations operate a

structured graduate recruitment programme

(35 of manufacturing and production)

bull Few organisations have closed graduate

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-forshy

profit sectors)

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2011 Recruitment difficulties bull One in three organisations report the length of

their recruitment process has led to the loss of

potential recruits

bull Three-quarters of organisations experienced

recruitment difficulties in the past few months

bull Managers and professionals and technical

positions are the most difficult vacancies to fill

bull As in previous years the main reason for

recruitment difficulties is a lack of necessary

specialist or technical skills

bull Nearly three-quarters of organisations had made

efforts to improve their employee brand over

the last year most commonly through employee

surveys and developing online career sites

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

applicants varies according to organisation sector

and size the most effective method overall

is reported to be through organisationsrsquo own

corporate websites as was the case last year

bull 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

bull Overall a third of organisations report they

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

bull Competency-based interviews (70) interviews

following the contents of CVsapplication forms

(63) and structured interviews (56) are as

last year the most common methods used to

select applicants

bull Two-fifths of organisations report they use

a strengths-based approach to recruitment

although it is less commonly used in the public

sector (26)

bull The median recruitment cost of filling a vacancy

is pound7500 for senior managersdirectors and pound2500

for other employees (adjusting for accuracy)

showing reductions compared with last year

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

economic climate has had a negative impact

on their organisationsrsquo resourcing budgets for

2011ndash12 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)

bull Changes in resourcing and talent practices in

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

bull Nearly half of public sector organisations will

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

bull The volume of applicants for vacancies has

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)

bull Most organisations remain focused on

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

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RESOURCING AND TALENT PLANNING

Diversity bull Overall in little change from previous years

just over half of organisations have a diversity

strategy rising to 90 of public sector

organisations

bull Our figures indicate a reduction in the use of

several methods to address diversity issues this

year particularly in the public sector which has

traditionally led the way in diversity practice

Labour turnover bull The median labour turnover rate has decreased

over the past few years (2011 125 2010

135 2009 157 2008 173)

bull Smaller organisations are most likely to report

that their labour turnover has increased and

larger organisations that it has decreased

bull 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 growthcuts in the

respective sectors

bull The proportion of organisations making ten

or more redundancies over the past year has

reduced from 33 in 2009 to 12 in 2010

Employee retention bull Only two-fifths (42) of organisations

experienced no difficulties in retaining staff

during 2010 a similar figure to the previous

year Managers and professionalsspecialists and

technical employees remain the most difficult

categories of staff to retain

bull Most organisations have taken one or more

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

bull The most frequently cited actions taken by

employers to address retention ndash improving

the people management skills of line managers

and increased learning and development

opportunities ndash 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

2011

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

Table 1 Organisations with formal resourcing strategies in place by size ()

Size ndash number of employees in UK 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

Fewer than 10 26

10ndash49 38

50ndash249 46

250ndash999 55

1000ndash4999 68

More than 5000 85

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Base 604

7

8

RESOURCING AND TALENT PLANNING

The number and nature of job vacancies There is considerable variation in the number

of vacancies respondentsrsquo organisations tried

to fill in 2010 partly because the number of

vacancies is strongly related to organisation size

(Table 2)2 Overall the median number of vacancies

has fallen from 30 in 2008 to 20 over the past two

years as the recession affected increasing numbers

of organisations (Table 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

(5000+ 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

Table 2 Median number of vacancies respondents tried to fill by size of organisation and sector

2011 survey 2010 survey 2009 survey

No of permanent staff employed in UK All Private

sector Public

services All Private sector

Public services All Private

sector Public

services

Median Median Median Median Median Median Median Median Median

1ndash49 3 3 1 3 3 2

50ndash249 12 12 10 12 10 14 10 10 8

250ndash999 45 50 30 46 45 50 60 52 70

1000ndash4999 110 150 55 100 100 100 300 300 300

More than 5000 200 500 150 550 850 500 800 800 550

All organisations 20 20 30 20 20 80 30 20 100 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 251ndash500

501ndash1000 1001ndash5000 5001ndash10000 10001+) 2009 categories have been combined where appropriate and otherwise matched with

the best corresponding category of 20112010

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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 organisations3 Public sector

organisations particularly those with more than

1000 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

Voluntary No of permanent staff community and not-employed in UK Private sector Public services for-profit All

Mean Mean Mean Mean

1ndash49 15 17 7 13

50ndash249 20 28 23 21

250ndash999 24 29 24 24

1000ndash4999 35 58 12 39

More than 5000 47 62 33 53

All organisations 25 45 19 27 Base 533

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 Same Less

Base 610

25

27

37

22

3837

50

32

50

23

31

28

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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

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

16ndash24-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

One in six organisations (17) report they are

employing more 16ndash24-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 16ndash24-year-olds being recruited (Table 4)

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Table 4 The employment of younger workers ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Percentage employing fewer 16ndash24-year-olds than one year ago

Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer 16ndash24-year-olds

Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer people

12 10 9 25 10

11 18 6 17 9

23 25 15 48 22

Base 605

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

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

5000 employees)9

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 programme11

Table 5 Activities organisations are considering ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Increasing apprenticeship schemes 30 48 24 33 27

Increasing your use of internships 22 27 23 12 27

Sponsoring students through university 10 20 8 12 1

Base 615

Table 6 Organisations operating a structured graduate recruitment programme by sector ()

2011 2010 2009 2008

All 27 34 22 23

Sector

Manufacturing and production 35 35 23 24

Private sector services 29 37 24 27

Voluntary community and not-for-profit 6 18 5 7

Public services 26 33 23 24

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Base 614 (2011) 472 (2010) 752 (2009)

11

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12

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 5000 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 250ndash999

employees and just 15 of organisations with

fewer than 50 employees12 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

39

42

9Fewer than 50

17

1650ndash249

21

29 250ndash999

1000ndash4999 47

61 More than 5000

62

10 40 50 60 70 80

2011

0 3020 Percentage

2010

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 professionalsspecialists

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

collaboration between industry and academic

institutions and more vocational training in order

to meet organisationsrsquo skill requirements

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

The proportion reporting their recruitment

problems are due to potential candidatesrsquo

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

lsquohangoverrsquo 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 yearrsquos findings this is particularly an

issue for the public sector (22) which is also more

likely to report the image of their sectoroccupation

is a problem (22)

Table 7 Organisations experiencing difficulties recruiting for one or more category of vacancy by organisation size ( of those that have had vacancies to fill)

Voluntary Manufacturing community

and Private sector and All 2011 production services Public services not-for-profit

Difficulty filling one or 75 88 77 66 62more vacancies

No difficulties experienced 25 12 23 34 38

Base 561

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RESOURCING AND TALENT PLANNING

Table 8 Categories of vacancy that proved particularly difficult to fill ( of respondents)

Voluntary community

Manufacturing Private and and sector Public not-for-

All 2011 production services services profit All 2010

Other managers and professionalsspecialists

34 41 33 27 34 37

Technical 30 53 29 20 16 28

Senior managers directors

14 13 16 10 16 16

Services (customer personal protective 7 6 8 3 5 5 and sales)

Administrative secretarial

4 3 4 4 4 3

Manualcraft workers 4 11 3 1 0 2

Other 6 5 3 10 11 4

No difficulties experienced

23 12 22 30 38 25

No vacancies to fill 6 3 7 10 1 6 Base 597 (2011) 468 (2010)

Voluntary community

Manufacturing Private and All and sector Public not-for- All

2011 production services services profit 2010

Table 9 Reasons for recruitment difficulties ()

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Lack of necessary specialist or technical skills 72 82 69 80 59 67

Look for more pay than you could offer 46 47 48 34 52 39

Lack of experience 40 42 43 27 41 36

Reluctance to move in current economic climate 19 24 18 17 15 26

Lack of interpersonal skills 16 9 19 10 20 12

No applicants 15 9 16 22 20 15

Image of sector occupationorganisation 13 7 12 22 11 12

Relocation difficulties 9 19 6 10 7 8

Lack of formal qualifications 7 7 7 5 7 4

The impact of the immigration cap 3 2 4 3 4

Other 4 3 3 8 7 7

Base 427 (2011) 330 (2010)

new item introduced in 2011

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 250ndash999 employees and one-

sixth of those with more than 5000 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

methods14 The public sector is most likely to

have introduced or extended flexible working

homeworking15 whereas the private sector is

more likely to have made efforts to improve its

brand through working with charities or corporate

sponsorship16 Voluntary community and not-forshy

profit organisations are most likely to have used

placement students to improve their brand17

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 organisationsrsquo 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 websites18

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 journalstrade press

Secondments are also deemed to be more effective

in these sectors than in the private sector

Table 10 Work undertaken over last year to improve employer brand ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Employee surveys 39 39 38 43

Developing online careers site 30 33 23 29

Introducingextending flexible working homeworking 24 20 39 29

Placement students 23 21 19 35

Graduate careers fairs 15 17 11 8

Working with charities 14 16 8 6

Corporate sponsorship 11 13 2 8

Introducing sabbaticals 3 4 1 5

Other 7 6 6 10

No action taken to improve employer brand 27 28 29 22

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Base 601

15

16

RESOURCING AND TALENT PLANNING

Table 11 Most effective methods for attracting applications by industry sector ()

Sector 2011 Number of UK employees 2011

All

2010

All

2011

Man

ufa

ctu

rin

gan

d p

rod

uct

ion

Priv

ate

sect

or

serv

ices

Pub

lic s

ervi

ces

Vo

lun

tary

co

mm

un

ity

and

no

t-fo

r-p

rofi

t

1ndash49

50ndash2

49

250ndash

999

100

0ndash4

999

Mo

re t

han

500

0

Own corporate website 63 59 44 57 77 66 42 55 57 77 79

Recruitment agencies 60 54 77 62 22 30 39 59 66 51 41

Local newspaper advertisements 36 32 38 23 41 51 28 35 35 29 29

Employee referral scheme 35 29 33 38 5 14 20 33 27 32 29

Commercial job boards 33 27 33 29 14 29 21 27 25 42 26

Specialist journalstrade press 31 27 24 23 30 43 26 23 32 32 24

Encourage speculative applicationsword of mouth 24 25 30 29 9 23 27 31 23 19 19

Jobcentre Plus 23 25 24 24 22 34 16 29 21 25 32

Professional networking (such as LinkedIn) 14 16 11 23 5 9 28 13 13 18 17

Search consultants 22 15 24 17 5 4 14 11 17 18 15

Links with schoolscollegesuniversities 18 13 16 13 9 17 12 13 11 18 15

Apprenticeships 12 11 19 9 13 9 10 10 11 12 17

National newspaper advertisements 16 11 4 6 23 29 10 9 15 10 15

Secondments 11 11 7 8 21 12 2 9 13 11 19

Links with other local organisations making redundancies 7 13 5 7 9 6 5 9 11 8

Alumni (previous employees) 5 5 6 7 2 1 7 2 6 11 3

Social networking sites (such as Facebook) 3 4 4 5 3 4 3 2 2 8 12

Local Employment Partnership (LEP) 6 3 1 4 2 5 1 2 3 4 9

Other 5 5 2 3 12 6 8 3 4 4 5

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Base 604 (2011) 464 (2010)

new item introduced in 2011

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

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 CVsapplication 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)

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-forshy

profit sector)

Table 12 Changes in attitudes to and relationships with recruitment partners over the past 12 months ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Not changed 36 34 40 39

Reduced use of recruitment partners 32 34 32 26

Formed a closer business partnership with them 19 23 8 12

Consider them an unnecessary expense 12 11 13 16

Consider them an unaffordable expense 11 10 11 22

Consider them integral to attracting top talent 9 11 2 4

Stopped using recruitment partners 6 5 8 5

Other 3 3 3 3 Base 604

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18

RESOURCING AND TALENT PLANNING

Table 13 Methods used to select applicants ()

2011 2010 2009 survey survey survey

Competency-based interviews 70 78 69

Interviews following contents of CVapplication form 63 64 68

Structured interviews (panel) 56 61 59

Tests for specific job-related skills 49 48 50

Telephone interviews 43 47 38

Literacy andor numeracy tests 38 43 39

Personalityaptitudepsychometric questionnaires 35 44 35

Assessment centres 35 42 35

Pre-application eliminationprogression question(s) 25 32 NA

General ability tests 23 27 44

Group exercises (for example role-playing) 21 30 26

Pre-interview references (academic or employment) 9 16 19

Video CVs 0 1 NA

Other 3 4 6

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Base 605 (2011) 473 (2010) 754 (2009)

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 1ndash49 employees use it

compared with 34 of organisations with 250ndash999

employees and 24 of organisations with more

than 5000 employees)20

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 strengths-

based 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

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

Recruitment costs 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

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

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 managerdirectors 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 managersdirectors than in the public or not-

for-profit sectors

Table 14 Criteria included in cost per hire calculations ()

Size ndash number of employees in UK

Advertising costs

Agencysearch costs

Employee referrals

Travel expenses

Relocation expenses

Fixed costs of resourcing team

Opportunity costs of hiring managers time

Other

Dont 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 (pound)

Median 2011 Median 2010 (no of (no of

Occupational group respondents) Minimum Maximum respondents)

Senior managersdirectors 7000 (219) 251 55000 8333 (234)

Other employees 2000 (246) 150 32000 2930 (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 (pound)

Voluntary

Median 2011 Manufacturing

and Private Public

community and not-for-

Occupational group production sector services profit

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Senior managersdirectors 7500 8000 9000 5000 3500

Other employees 2500 3400 2000 3000 1500 Base 150

19

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20

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 organisationsrsquo resourcing budgets for 2011ndash12

(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 inshy

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

2011 Changes in recruitment practices are also

anticipated More organisations plan to make use

of new mediatechnology 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 organisationsrsquo resourcing budgets ()

Private Public Voluntary community All sector services and not-for-profit

2011 2010 2011 2010 2011 2010 2011 2010

Reduced 49 53 41 51 82 59 51 61

Stayed about the same 36 37 39 40 14 36 40 34

Increased 8 7 11 4 1 5 4 5

Dont know 7 3 8 5 3 5 Base 615 (2011) 475 (2010)

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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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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23

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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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25

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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

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11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

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2011

ABOUT US Chartered Institute of Personnel and Development

The Chartered Institute of Personnel and

Development (CIPD) is Europersquos largest HR and

development professional body As a globally

recognised brand with over 135000 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

We offer

bull membership

bull professional development including

qualifications and training

bull networking opportunities and world-class

events

bull expertise in HR capability-building and

consultancy services

bull topical insights and analysis

bull a wealth of resources and a voice for HR

cipdcouk

Hays

Hays is the worldrsquos leading recruiting expert in

qualified professional and skilled work It employs

over 7000 staff in 257 offices across 30 countries Last

year Hays placed around 50000 people in permanent

jobs and nearly 180000 in temporary positions

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-forshy

profit sectors

Its recruiting experts deal with 150000 CVs every

month and more than 50000 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 personrsquos life

wwwhayscouk

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RESOURCING AND TALENT PLANNING

SUmmARy Of kEy fINDINGS

The CIPDrsquos 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 organisationsrsquo 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 bull Just over half of survey participants report

having a formal resourcing strategy

bull Larger organisations are most likely to have a

resourcing strategy

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

organisations attempted to fill in 2010 remains

as low as in 2009 during the recession

bull The number of vacancies in very large

organisations particularly in the public sector

has dramatically reduced over the past three

years

bull Three-quarters of permanent vacancies were

filled with external candidates

bull Three-fifths of organisations require candidates

to have specific sector experience

bull 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)

Graduate recruitment bull Two-fifths of organisations are concerned that

the increase in university tuition fees will have

an impact on the number of graduates in the

marketplace

bull One in ten organisations are considering

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)

bull Just over a quarter of organisations operate a

structured graduate recruitment programme

(35 of manufacturing and production)

bull Few organisations have closed graduate

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-forshy

profit sectors)

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2011 Recruitment difficulties bull One in three organisations report the length of

their recruitment process has led to the loss of

potential recruits

bull Three-quarters of organisations experienced

recruitment difficulties in the past few months

bull Managers and professionals and technical

positions are the most difficult vacancies to fill

bull As in previous years the main reason for

recruitment difficulties is a lack of necessary

specialist or technical skills

bull Nearly three-quarters of organisations had made

efforts to improve their employee brand over

the last year most commonly through employee

surveys and developing online career sites

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

applicants varies according to organisation sector

and size the most effective method overall

is reported to be through organisationsrsquo own

corporate websites as was the case last year

bull 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

bull Overall a third of organisations report they

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

bull Competency-based interviews (70) interviews

following the contents of CVsapplication forms

(63) and structured interviews (56) are as

last year the most common methods used to

select applicants

bull Two-fifths of organisations report they use

a strengths-based approach to recruitment

although it is less commonly used in the public

sector (26)

bull The median recruitment cost of filling a vacancy

is pound7500 for senior managersdirectors and pound2500

for other employees (adjusting for accuracy)

showing reductions compared with last year

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

economic climate has had a negative impact

on their organisationsrsquo resourcing budgets for

2011ndash12 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)

bull Changes in resourcing and talent practices in

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

bull Nearly half of public sector organisations will

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

bull The volume of applicants for vacancies has

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)

bull Most organisations remain focused on

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

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6

RESOURCING AND TALENT PLANNING

Diversity bull Overall in little change from previous years

just over half of organisations have a diversity

strategy rising to 90 of public sector

organisations

bull Our figures indicate a reduction in the use of

several methods to address diversity issues this

year particularly in the public sector which has

traditionally led the way in diversity practice

Labour turnover bull The median labour turnover rate has decreased

over the past few years (2011 125 2010

135 2009 157 2008 173)

bull Smaller organisations are most likely to report

that their labour turnover has increased and

larger organisations that it has decreased

bull 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 growthcuts in the

respective sectors

bull The proportion of organisations making ten

or more redundancies over the past year has

reduced from 33 in 2009 to 12 in 2010

Employee retention bull Only two-fifths (42) of organisations

experienced no difficulties in retaining staff

during 2010 a similar figure to the previous

year Managers and professionalsspecialists and

technical employees remain the most difficult

categories of staff to retain

bull Most organisations have taken one or more

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

bull The most frequently cited actions taken by

employers to address retention ndash improving

the people management skills of line managers

and increased learning and development

opportunities ndash 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

2011

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

Table 1 Organisations with formal resourcing strategies in place by size ()

Size ndash number of employees in UK 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

Fewer than 10 26

10ndash49 38

50ndash249 46

250ndash999 55

1000ndash4999 68

More than 5000 85

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Base 604

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8

RESOURCING AND TALENT PLANNING

The number and nature of job vacancies There is considerable variation in the number

of vacancies respondentsrsquo organisations tried

to fill in 2010 partly because the number of

vacancies is strongly related to organisation size

(Table 2)2 Overall the median number of vacancies

has fallen from 30 in 2008 to 20 over the past two

years as the recession affected increasing numbers

of organisations (Table 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

(5000+ 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

Table 2 Median number of vacancies respondents tried to fill by size of organisation and sector

2011 survey 2010 survey 2009 survey

No of permanent staff employed in UK All Private

sector Public

services All Private sector

Public services All Private

sector Public

services

Median Median Median Median Median Median Median Median Median

1ndash49 3 3 1 3 3 2

50ndash249 12 12 10 12 10 14 10 10 8

250ndash999 45 50 30 46 45 50 60 52 70

1000ndash4999 110 150 55 100 100 100 300 300 300

More than 5000 200 500 150 550 850 500 800 800 550

All organisations 20 20 30 20 20 80 30 20 100 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 251ndash500

501ndash1000 1001ndash5000 5001ndash10000 10001+) 2009 categories have been combined where appropriate and otherwise matched with

the best corresponding category of 20112010

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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 organisations3 Public sector

organisations particularly those with more than

1000 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

Voluntary No of permanent staff community and not-employed in UK Private sector Public services for-profit All

Mean Mean Mean Mean

1ndash49 15 17 7 13

50ndash249 20 28 23 21

250ndash999 24 29 24 24

1000ndash4999 35 58 12 39

More than 5000 47 62 33 53

All organisations 25 45 19 27 Base 533

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 Same Less

Base 610

25

27

37

22

3837

50

32

50

23

31

28

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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

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

16ndash24-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

One in six organisations (17) report they are

employing more 16ndash24-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 16ndash24-year-olds being recruited (Table 4)

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Table 4 The employment of younger workers ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Percentage employing fewer 16ndash24-year-olds than one year ago

Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer 16ndash24-year-olds

Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer people

12 10 9 25 10

11 18 6 17 9

23 25 15 48 22

Base 605

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

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

5000 employees)9

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 programme11

Table 5 Activities organisations are considering ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Increasing apprenticeship schemes 30 48 24 33 27

Increasing your use of internships 22 27 23 12 27

Sponsoring students through university 10 20 8 12 1

Base 615

Table 6 Organisations operating a structured graduate recruitment programme by sector ()

2011 2010 2009 2008

All 27 34 22 23

Sector

Manufacturing and production 35 35 23 24

Private sector services 29 37 24 27

Voluntary community and not-for-profit 6 18 5 7

Public services 26 33 23 24

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Base 614 (2011) 472 (2010) 752 (2009)

11

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12

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 5000 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 250ndash999

employees and just 15 of organisations with

fewer than 50 employees12 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

39

42

9Fewer than 50

17

1650ndash249

21

29 250ndash999

1000ndash4999 47

61 More than 5000

62

10 40 50 60 70 80

2011

0 3020 Percentage

2010

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 professionalsspecialists

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

collaboration between industry and academic

institutions and more vocational training in order

to meet organisationsrsquo skill requirements

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

The proportion reporting their recruitment

problems are due to potential candidatesrsquo

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

lsquohangoverrsquo 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 yearrsquos findings this is particularly an

issue for the public sector (22) which is also more

likely to report the image of their sectoroccupation

is a problem (22)

Table 7 Organisations experiencing difficulties recruiting for one or more category of vacancy by organisation size ( of those that have had vacancies to fill)

Voluntary Manufacturing community

and Private sector and All 2011 production services Public services not-for-profit

Difficulty filling one or 75 88 77 66 62more vacancies

No difficulties experienced 25 12 23 34 38

Base 561

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RESOURCING AND TALENT PLANNING

Table 8 Categories of vacancy that proved particularly difficult to fill ( of respondents)

Voluntary community

Manufacturing Private and and sector Public not-for-

All 2011 production services services profit All 2010

Other managers and professionalsspecialists

34 41 33 27 34 37

Technical 30 53 29 20 16 28

Senior managers directors

14 13 16 10 16 16

Services (customer personal protective 7 6 8 3 5 5 and sales)

Administrative secretarial

4 3 4 4 4 3

Manualcraft workers 4 11 3 1 0 2

Other 6 5 3 10 11 4

No difficulties experienced

23 12 22 30 38 25

No vacancies to fill 6 3 7 10 1 6 Base 597 (2011) 468 (2010)

Voluntary community

Manufacturing Private and All and sector Public not-for- All

2011 production services services profit 2010

Table 9 Reasons for recruitment difficulties ()

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Lack of necessary specialist or technical skills 72 82 69 80 59 67

Look for more pay than you could offer 46 47 48 34 52 39

Lack of experience 40 42 43 27 41 36

Reluctance to move in current economic climate 19 24 18 17 15 26

Lack of interpersonal skills 16 9 19 10 20 12

No applicants 15 9 16 22 20 15

Image of sector occupationorganisation 13 7 12 22 11 12

Relocation difficulties 9 19 6 10 7 8

Lack of formal qualifications 7 7 7 5 7 4

The impact of the immigration cap 3 2 4 3 4

Other 4 3 3 8 7 7

Base 427 (2011) 330 (2010)

new item introduced in 2011

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 250ndash999 employees and one-

sixth of those with more than 5000 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

methods14 The public sector is most likely to

have introduced or extended flexible working

homeworking15 whereas the private sector is

more likely to have made efforts to improve its

brand through working with charities or corporate

sponsorship16 Voluntary community and not-forshy

profit organisations are most likely to have used

placement students to improve their brand17

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 organisationsrsquo 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 websites18

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 journalstrade press

Secondments are also deemed to be more effective

in these sectors than in the private sector

Table 10 Work undertaken over last year to improve employer brand ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Employee surveys 39 39 38 43

Developing online careers site 30 33 23 29

Introducingextending flexible working homeworking 24 20 39 29

Placement students 23 21 19 35

Graduate careers fairs 15 17 11 8

Working with charities 14 16 8 6

Corporate sponsorship 11 13 2 8

Introducing sabbaticals 3 4 1 5

Other 7 6 6 10

No action taken to improve employer brand 27 28 29 22

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Base 601

15

16

RESOURCING AND TALENT PLANNING

Table 11 Most effective methods for attracting applications by industry sector ()

Sector 2011 Number of UK employees 2011

All

2010

All

2011

Man

ufa

ctu

rin

gan

d p

rod

uct

ion

Priv

ate

sect

or

serv

ices

Pub

lic s

ervi

ces

Vo

lun

tary

co

mm

un

ity

and

no

t-fo

r-p

rofi

t

1ndash49

50ndash2

49

250ndash

999

100

0ndash4

999

Mo

re t

han

500

0

Own corporate website 63 59 44 57 77 66 42 55 57 77 79

Recruitment agencies 60 54 77 62 22 30 39 59 66 51 41

Local newspaper advertisements 36 32 38 23 41 51 28 35 35 29 29

Employee referral scheme 35 29 33 38 5 14 20 33 27 32 29

Commercial job boards 33 27 33 29 14 29 21 27 25 42 26

Specialist journalstrade press 31 27 24 23 30 43 26 23 32 32 24

Encourage speculative applicationsword of mouth 24 25 30 29 9 23 27 31 23 19 19

Jobcentre Plus 23 25 24 24 22 34 16 29 21 25 32

Professional networking (such as LinkedIn) 14 16 11 23 5 9 28 13 13 18 17

Search consultants 22 15 24 17 5 4 14 11 17 18 15

Links with schoolscollegesuniversities 18 13 16 13 9 17 12 13 11 18 15

Apprenticeships 12 11 19 9 13 9 10 10 11 12 17

National newspaper advertisements 16 11 4 6 23 29 10 9 15 10 15

Secondments 11 11 7 8 21 12 2 9 13 11 19

Links with other local organisations making redundancies 7 13 5 7 9 6 5 9 11 8

Alumni (previous employees) 5 5 6 7 2 1 7 2 6 11 3

Social networking sites (such as Facebook) 3 4 4 5 3 4 3 2 2 8 12

Local Employment Partnership (LEP) 6 3 1 4 2 5 1 2 3 4 9

Other 5 5 2 3 12 6 8 3 4 4 5

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Base 604 (2011) 464 (2010)

new item introduced in 2011

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

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 CVsapplication 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)

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-forshy

profit sector)

Table 12 Changes in attitudes to and relationships with recruitment partners over the past 12 months ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Not changed 36 34 40 39

Reduced use of recruitment partners 32 34 32 26

Formed a closer business partnership with them 19 23 8 12

Consider them an unnecessary expense 12 11 13 16

Consider them an unaffordable expense 11 10 11 22

Consider them integral to attracting top talent 9 11 2 4

Stopped using recruitment partners 6 5 8 5

Other 3 3 3 3 Base 604

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RESOURCING AND TALENT PLANNING

Table 13 Methods used to select applicants ()

2011 2010 2009 survey survey survey

Competency-based interviews 70 78 69

Interviews following contents of CVapplication form 63 64 68

Structured interviews (panel) 56 61 59

Tests for specific job-related skills 49 48 50

Telephone interviews 43 47 38

Literacy andor numeracy tests 38 43 39

Personalityaptitudepsychometric questionnaires 35 44 35

Assessment centres 35 42 35

Pre-application eliminationprogression question(s) 25 32 NA

General ability tests 23 27 44

Group exercises (for example role-playing) 21 30 26

Pre-interview references (academic or employment) 9 16 19

Video CVs 0 1 NA

Other 3 4 6

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Base 605 (2011) 473 (2010) 754 (2009)

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 1ndash49 employees use it

compared with 34 of organisations with 250ndash999

employees and 24 of organisations with more

than 5000 employees)20

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 strengths-

based 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

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

Recruitment costs 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

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

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 managerdirectors 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 managersdirectors than in the public or not-

for-profit sectors

Table 14 Criteria included in cost per hire calculations ()

Size ndash number of employees in UK

Advertising costs

Agencysearch costs

Employee referrals

Travel expenses

Relocation expenses

Fixed costs of resourcing team

Opportunity costs of hiring managers time

Other

Dont 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 (pound)

Median 2011 Median 2010 (no of (no of

Occupational group respondents) Minimum Maximum respondents)

Senior managersdirectors 7000 (219) 251 55000 8333 (234)

Other employees 2000 (246) 150 32000 2930 (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 (pound)

Voluntary

Median 2011 Manufacturing

and Private Public

community and not-for-

Occupational group production sector services profit

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Senior managersdirectors 7500 8000 9000 5000 3500

Other employees 2500 3400 2000 3000 1500 Base 150

19

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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 organisationsrsquo resourcing budgets for 2011ndash12

(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 inshy

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

2011 Changes in recruitment practices are also

anticipated More organisations plan to make use

of new mediatechnology 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 organisationsrsquo resourcing budgets ()

Private Public Voluntary community All sector services and not-for-profit

2011 2010 2011 2010 2011 2010 2011 2010

Reduced 49 53 41 51 82 59 51 61

Stayed about the same 36 37 39 40 14 36 40 34

Increased 8 7 11 4 1 5 4 5

Dont know 7 3 8 5 3 5 Base 615 (2011) 475 (2010)

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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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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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

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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40

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

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4

RESOURCING AND TALENT PLANNING

SUmmARy Of kEy fINDINGS

The CIPDrsquos 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 organisationsrsquo 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 bull Just over half of survey participants report

having a formal resourcing strategy

bull Larger organisations are most likely to have a

resourcing strategy

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

organisations attempted to fill in 2010 remains

as low as in 2009 during the recession

bull The number of vacancies in very large

organisations particularly in the public sector

has dramatically reduced over the past three

years

bull Three-quarters of permanent vacancies were

filled with external candidates

bull Three-fifths of organisations require candidates

to have specific sector experience

bull 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)

Graduate recruitment bull Two-fifths of organisations are concerned that

the increase in university tuition fees will have

an impact on the number of graduates in the

marketplace

bull One in ten organisations are considering

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)

bull Just over a quarter of organisations operate a

structured graduate recruitment programme

(35 of manufacturing and production)

bull Few organisations have closed graduate

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-forshy

profit sectors)

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2011 Recruitment difficulties bull One in three organisations report the length of

their recruitment process has led to the loss of

potential recruits

bull Three-quarters of organisations experienced

recruitment difficulties in the past few months

bull Managers and professionals and technical

positions are the most difficult vacancies to fill

bull As in previous years the main reason for

recruitment difficulties is a lack of necessary

specialist or technical skills

bull Nearly three-quarters of organisations had made

efforts to improve their employee brand over

the last year most commonly through employee

surveys and developing online career sites

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

applicants varies according to organisation sector

and size the most effective method overall

is reported to be through organisationsrsquo own

corporate websites as was the case last year

bull 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

bull Overall a third of organisations report they

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

bull Competency-based interviews (70) interviews

following the contents of CVsapplication forms

(63) and structured interviews (56) are as

last year the most common methods used to

select applicants

bull Two-fifths of organisations report they use

a strengths-based approach to recruitment

although it is less commonly used in the public

sector (26)

bull The median recruitment cost of filling a vacancy

is pound7500 for senior managersdirectors and pound2500

for other employees (adjusting for accuracy)

showing reductions compared with last year

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

economic climate has had a negative impact

on their organisationsrsquo resourcing budgets for

2011ndash12 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)

bull Changes in resourcing and talent practices in

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

bull Nearly half of public sector organisations will

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

bull The volume of applicants for vacancies has

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)

bull Most organisations remain focused on

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

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RESOURCING AND TALENT PLANNING

Diversity bull Overall in little change from previous years

just over half of organisations have a diversity

strategy rising to 90 of public sector

organisations

bull Our figures indicate a reduction in the use of

several methods to address diversity issues this

year particularly in the public sector which has

traditionally led the way in diversity practice

Labour turnover bull The median labour turnover rate has decreased

over the past few years (2011 125 2010

135 2009 157 2008 173)

bull Smaller organisations are most likely to report

that their labour turnover has increased and

larger organisations that it has decreased

bull 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 growthcuts in the

respective sectors

bull The proportion of organisations making ten

or more redundancies over the past year has

reduced from 33 in 2009 to 12 in 2010

Employee retention bull Only two-fifths (42) of organisations

experienced no difficulties in retaining staff

during 2010 a similar figure to the previous

year Managers and professionalsspecialists and

technical employees remain the most difficult

categories of staff to retain

bull Most organisations have taken one or more

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

bull The most frequently cited actions taken by

employers to address retention ndash improving

the people management skills of line managers

and increased learning and development

opportunities ndash 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

2011

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

Table 1 Organisations with formal resourcing strategies in place by size ()

Size ndash number of employees in UK 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

Fewer than 10 26

10ndash49 38

50ndash249 46

250ndash999 55

1000ndash4999 68

More than 5000 85

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Base 604

7

8

RESOURCING AND TALENT PLANNING

The number and nature of job vacancies There is considerable variation in the number

of vacancies respondentsrsquo organisations tried

to fill in 2010 partly because the number of

vacancies is strongly related to organisation size

(Table 2)2 Overall the median number of vacancies

has fallen from 30 in 2008 to 20 over the past two

years as the recession affected increasing numbers

of organisations (Table 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

(5000+ 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

Table 2 Median number of vacancies respondents tried to fill by size of organisation and sector

2011 survey 2010 survey 2009 survey

No of permanent staff employed in UK All Private

sector Public

services All Private sector

Public services All Private

sector Public

services

Median Median Median Median Median Median Median Median Median

1ndash49 3 3 1 3 3 2

50ndash249 12 12 10 12 10 14 10 10 8

250ndash999 45 50 30 46 45 50 60 52 70

1000ndash4999 110 150 55 100 100 100 300 300 300

More than 5000 200 500 150 550 850 500 800 800 550

All organisations 20 20 30 20 20 80 30 20 100 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 251ndash500

501ndash1000 1001ndash5000 5001ndash10000 10001+) 2009 categories have been combined where appropriate and otherwise matched with

the best corresponding category of 20112010

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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 organisations3 Public sector

organisations particularly those with more than

1000 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

Voluntary No of permanent staff community and not-employed in UK Private sector Public services for-profit All

Mean Mean Mean Mean

1ndash49 15 17 7 13

50ndash249 20 28 23 21

250ndash999 24 29 24 24

1000ndash4999 35 58 12 39

More than 5000 47 62 33 53

All organisations 25 45 19 27 Base 533

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 Same Less

Base 610

25

27

37

22

3837

50

32

50

23

31

28

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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

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

16ndash24-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

One in six organisations (17) report they are

employing more 16ndash24-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 16ndash24-year-olds being recruited (Table 4)

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Table 4 The employment of younger workers ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Percentage employing fewer 16ndash24-year-olds than one year ago

Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer 16ndash24-year-olds

Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer people

12 10 9 25 10

11 18 6 17 9

23 25 15 48 22

Base 605

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

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

5000 employees)9

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 programme11

Table 5 Activities organisations are considering ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Increasing apprenticeship schemes 30 48 24 33 27

Increasing your use of internships 22 27 23 12 27

Sponsoring students through university 10 20 8 12 1

Base 615

Table 6 Organisations operating a structured graduate recruitment programme by sector ()

2011 2010 2009 2008

All 27 34 22 23

Sector

Manufacturing and production 35 35 23 24

Private sector services 29 37 24 27

Voluntary community and not-for-profit 6 18 5 7

Public services 26 33 23 24

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Base 614 (2011) 472 (2010) 752 (2009)

11

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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 5000 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 250ndash999

employees and just 15 of organisations with

fewer than 50 employees12 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

39

42

9Fewer than 50

17

1650ndash249

21

29 250ndash999

1000ndash4999 47

61 More than 5000

62

10 40 50 60 70 80

2011

0 3020 Percentage

2010

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 professionalsspecialists

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

collaboration between industry and academic

institutions and more vocational training in order

to meet organisationsrsquo skill requirements

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

The proportion reporting their recruitment

problems are due to potential candidatesrsquo

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

lsquohangoverrsquo 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 yearrsquos findings this is particularly an

issue for the public sector (22) which is also more

likely to report the image of their sectoroccupation

is a problem (22)

Table 7 Organisations experiencing difficulties recruiting for one or more category of vacancy by organisation size ( of those that have had vacancies to fill)

Voluntary Manufacturing community

and Private sector and All 2011 production services Public services not-for-profit

Difficulty filling one or 75 88 77 66 62more vacancies

No difficulties experienced 25 12 23 34 38

Base 561

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RESOURCING AND TALENT PLANNING

Table 8 Categories of vacancy that proved particularly difficult to fill ( of respondents)

Voluntary community

Manufacturing Private and and sector Public not-for-

All 2011 production services services profit All 2010

Other managers and professionalsspecialists

34 41 33 27 34 37

Technical 30 53 29 20 16 28

Senior managers directors

14 13 16 10 16 16

Services (customer personal protective 7 6 8 3 5 5 and sales)

Administrative secretarial

4 3 4 4 4 3

Manualcraft workers 4 11 3 1 0 2

Other 6 5 3 10 11 4

No difficulties experienced

23 12 22 30 38 25

No vacancies to fill 6 3 7 10 1 6 Base 597 (2011) 468 (2010)

Voluntary community

Manufacturing Private and All and sector Public not-for- All

2011 production services services profit 2010

Table 9 Reasons for recruitment difficulties ()

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Lack of necessary specialist or technical skills 72 82 69 80 59 67

Look for more pay than you could offer 46 47 48 34 52 39

Lack of experience 40 42 43 27 41 36

Reluctance to move in current economic climate 19 24 18 17 15 26

Lack of interpersonal skills 16 9 19 10 20 12

No applicants 15 9 16 22 20 15

Image of sector occupationorganisation 13 7 12 22 11 12

Relocation difficulties 9 19 6 10 7 8

Lack of formal qualifications 7 7 7 5 7 4

The impact of the immigration cap 3 2 4 3 4

Other 4 3 3 8 7 7

Base 427 (2011) 330 (2010)

new item introduced in 2011

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 250ndash999 employees and one-

sixth of those with more than 5000 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

methods14 The public sector is most likely to

have introduced or extended flexible working

homeworking15 whereas the private sector is

more likely to have made efforts to improve its

brand through working with charities or corporate

sponsorship16 Voluntary community and not-forshy

profit organisations are most likely to have used

placement students to improve their brand17

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 organisationsrsquo 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 websites18

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 journalstrade press

Secondments are also deemed to be more effective

in these sectors than in the private sector

Table 10 Work undertaken over last year to improve employer brand ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Employee surveys 39 39 38 43

Developing online careers site 30 33 23 29

Introducingextending flexible working homeworking 24 20 39 29

Placement students 23 21 19 35

Graduate careers fairs 15 17 11 8

Working with charities 14 16 8 6

Corporate sponsorship 11 13 2 8

Introducing sabbaticals 3 4 1 5

Other 7 6 6 10

No action taken to improve employer brand 27 28 29 22

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Base 601

15

16

RESOURCING AND TALENT PLANNING

Table 11 Most effective methods for attracting applications by industry sector ()

Sector 2011 Number of UK employees 2011

All

2010

All

2011

Man

ufa

ctu

rin

gan

d p

rod

uct

ion

Priv

ate

sect

or

serv

ices

Pub

lic s

ervi

ces

Vo

lun

tary

co

mm

un

ity

and

no

t-fo

r-p

rofi

t

1ndash49

50ndash2

49

250ndash

999

100

0ndash4

999

Mo

re t

han

500

0

Own corporate website 63 59 44 57 77 66 42 55 57 77 79

Recruitment agencies 60 54 77 62 22 30 39 59 66 51 41

Local newspaper advertisements 36 32 38 23 41 51 28 35 35 29 29

Employee referral scheme 35 29 33 38 5 14 20 33 27 32 29

Commercial job boards 33 27 33 29 14 29 21 27 25 42 26

Specialist journalstrade press 31 27 24 23 30 43 26 23 32 32 24

Encourage speculative applicationsword of mouth 24 25 30 29 9 23 27 31 23 19 19

Jobcentre Plus 23 25 24 24 22 34 16 29 21 25 32

Professional networking (such as LinkedIn) 14 16 11 23 5 9 28 13 13 18 17

Search consultants 22 15 24 17 5 4 14 11 17 18 15

Links with schoolscollegesuniversities 18 13 16 13 9 17 12 13 11 18 15

Apprenticeships 12 11 19 9 13 9 10 10 11 12 17

National newspaper advertisements 16 11 4 6 23 29 10 9 15 10 15

Secondments 11 11 7 8 21 12 2 9 13 11 19

Links with other local organisations making redundancies 7 13 5 7 9 6 5 9 11 8

Alumni (previous employees) 5 5 6 7 2 1 7 2 6 11 3

Social networking sites (such as Facebook) 3 4 4 5 3 4 3 2 2 8 12

Local Employment Partnership (LEP) 6 3 1 4 2 5 1 2 3 4 9

Other 5 5 2 3 12 6 8 3 4 4 5

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Base 604 (2011) 464 (2010)

new item introduced in 2011

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

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 CVsapplication 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)

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-forshy

profit sector)

Table 12 Changes in attitudes to and relationships with recruitment partners over the past 12 months ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Not changed 36 34 40 39

Reduced use of recruitment partners 32 34 32 26

Formed a closer business partnership with them 19 23 8 12

Consider them an unnecessary expense 12 11 13 16

Consider them an unaffordable expense 11 10 11 22

Consider them integral to attracting top talent 9 11 2 4

Stopped using recruitment partners 6 5 8 5

Other 3 3 3 3 Base 604

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RESOURCING AND TALENT PLANNING

Table 13 Methods used to select applicants ()

2011 2010 2009 survey survey survey

Competency-based interviews 70 78 69

Interviews following contents of CVapplication form 63 64 68

Structured interviews (panel) 56 61 59

Tests for specific job-related skills 49 48 50

Telephone interviews 43 47 38

Literacy andor numeracy tests 38 43 39

Personalityaptitudepsychometric questionnaires 35 44 35

Assessment centres 35 42 35

Pre-application eliminationprogression question(s) 25 32 NA

General ability tests 23 27 44

Group exercises (for example role-playing) 21 30 26

Pre-interview references (academic or employment) 9 16 19

Video CVs 0 1 NA

Other 3 4 6

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Base 605 (2011) 473 (2010) 754 (2009)

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 1ndash49 employees use it

compared with 34 of organisations with 250ndash999

employees and 24 of organisations with more

than 5000 employees)20

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 strengths-

based 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

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

Recruitment costs 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

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

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 managerdirectors 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 managersdirectors than in the public or not-

for-profit sectors

Table 14 Criteria included in cost per hire calculations ()

Size ndash number of employees in UK

Advertising costs

Agencysearch costs

Employee referrals

Travel expenses

Relocation expenses

Fixed costs of resourcing team

Opportunity costs of hiring managers time

Other

Dont 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 (pound)

Median 2011 Median 2010 (no of (no of

Occupational group respondents) Minimum Maximum respondents)

Senior managersdirectors 7000 (219) 251 55000 8333 (234)

Other employees 2000 (246) 150 32000 2930 (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 (pound)

Voluntary

Median 2011 Manufacturing

and Private Public

community and not-for-

Occupational group production sector services profit

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Senior managersdirectors 7500 8000 9000 5000 3500

Other employees 2500 3400 2000 3000 1500 Base 150

19

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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 organisationsrsquo resourcing budgets for 2011ndash12

(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 inshy

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

2011 Changes in recruitment practices are also

anticipated More organisations plan to make use

of new mediatechnology 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 organisationsrsquo resourcing budgets ()

Private Public Voluntary community All sector services and not-for-profit

2011 2010 2011 2010 2011 2010 2011 2010

Reduced 49 53 41 51 82 59 51 61

Stayed about the same 36 37 39 40 14 36 40 34

Increased 8 7 11 4 1 5 4 5

Dont know 7 3 8 5 3 5 Base 615 (2011) 475 (2010)

RESO

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21

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22

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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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23

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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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25

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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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29

2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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

RESO

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35

2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

cipd

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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40

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

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5

2011 Recruitment difficulties bull One in three organisations report the length of

their recruitment process has led to the loss of

potential recruits

bull Three-quarters of organisations experienced

recruitment difficulties in the past few months

bull Managers and professionals and technical

positions are the most difficult vacancies to fill

bull As in previous years the main reason for

recruitment difficulties is a lack of necessary

specialist or technical skills

bull Nearly three-quarters of organisations had made

efforts to improve their employee brand over

the last year most commonly through employee

surveys and developing online career sites

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

applicants varies according to organisation sector

and size the most effective method overall

is reported to be through organisationsrsquo own

corporate websites as was the case last year

bull 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

bull Overall a third of organisations report they

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

bull Competency-based interviews (70) interviews

following the contents of CVsapplication forms

(63) and structured interviews (56) are as

last year the most common methods used to

select applicants

bull Two-fifths of organisations report they use

a strengths-based approach to recruitment

although it is less commonly used in the public

sector (26)

bull The median recruitment cost of filling a vacancy

is pound7500 for senior managersdirectors and pound2500

for other employees (adjusting for accuracy)

showing reductions compared with last year

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

economic climate has had a negative impact

on their organisationsrsquo resourcing budgets for

2011ndash12 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)

bull Changes in resourcing and talent practices in

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

bull Nearly half of public sector organisations will

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

bull The volume of applicants for vacancies has

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)

bull Most organisations remain focused on

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

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RESOURCING AND TALENT PLANNING

Diversity bull Overall in little change from previous years

just over half of organisations have a diversity

strategy rising to 90 of public sector

organisations

bull Our figures indicate a reduction in the use of

several methods to address diversity issues this

year particularly in the public sector which has

traditionally led the way in diversity practice

Labour turnover bull The median labour turnover rate has decreased

over the past few years (2011 125 2010

135 2009 157 2008 173)

bull Smaller organisations are most likely to report

that their labour turnover has increased and

larger organisations that it has decreased

bull 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 growthcuts in the

respective sectors

bull The proportion of organisations making ten

or more redundancies over the past year has

reduced from 33 in 2009 to 12 in 2010

Employee retention bull Only two-fifths (42) of organisations

experienced no difficulties in retaining staff

during 2010 a similar figure to the previous

year Managers and professionalsspecialists and

technical employees remain the most difficult

categories of staff to retain

bull Most organisations have taken one or more

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

bull The most frequently cited actions taken by

employers to address retention ndash improving

the people management skills of line managers

and increased learning and development

opportunities ndash 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

2011

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

Table 1 Organisations with formal resourcing strategies in place by size ()

Size ndash number of employees in UK 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

Fewer than 10 26

10ndash49 38

50ndash249 46

250ndash999 55

1000ndash4999 68

More than 5000 85

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Base 604

7

8

RESOURCING AND TALENT PLANNING

The number and nature of job vacancies There is considerable variation in the number

of vacancies respondentsrsquo organisations tried

to fill in 2010 partly because the number of

vacancies is strongly related to organisation size

(Table 2)2 Overall the median number of vacancies

has fallen from 30 in 2008 to 20 over the past two

years as the recession affected increasing numbers

of organisations (Table 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

(5000+ 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

Table 2 Median number of vacancies respondents tried to fill by size of organisation and sector

2011 survey 2010 survey 2009 survey

No of permanent staff employed in UK All Private

sector Public

services All Private sector

Public services All Private

sector Public

services

Median Median Median Median Median Median Median Median Median

1ndash49 3 3 1 3 3 2

50ndash249 12 12 10 12 10 14 10 10 8

250ndash999 45 50 30 46 45 50 60 52 70

1000ndash4999 110 150 55 100 100 100 300 300 300

More than 5000 200 500 150 550 850 500 800 800 550

All organisations 20 20 30 20 20 80 30 20 100 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 251ndash500

501ndash1000 1001ndash5000 5001ndash10000 10001+) 2009 categories have been combined where appropriate and otherwise matched with

the best corresponding category of 20112010

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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 organisations3 Public sector

organisations particularly those with more than

1000 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

Voluntary No of permanent staff community and not-employed in UK Private sector Public services for-profit All

Mean Mean Mean Mean

1ndash49 15 17 7 13

50ndash249 20 28 23 21

250ndash999 24 29 24 24

1000ndash4999 35 58 12 39

More than 5000 47 62 33 53

All organisations 25 45 19 27 Base 533

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 Same Less

Base 610

25

27

37

22

3837

50

32

50

23

31

28

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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

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

16ndash24-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

One in six organisations (17) report they are

employing more 16ndash24-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 16ndash24-year-olds being recruited (Table 4)

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Table 4 The employment of younger workers ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Percentage employing fewer 16ndash24-year-olds than one year ago

Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer 16ndash24-year-olds

Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer people

12 10 9 25 10

11 18 6 17 9

23 25 15 48 22

Base 605

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

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

5000 employees)9

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 programme11

Table 5 Activities organisations are considering ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Increasing apprenticeship schemes 30 48 24 33 27

Increasing your use of internships 22 27 23 12 27

Sponsoring students through university 10 20 8 12 1

Base 615

Table 6 Organisations operating a structured graduate recruitment programme by sector ()

2011 2010 2009 2008

All 27 34 22 23

Sector

Manufacturing and production 35 35 23 24

Private sector services 29 37 24 27

Voluntary community and not-for-profit 6 18 5 7

Public services 26 33 23 24

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Base 614 (2011) 472 (2010) 752 (2009)

11

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12

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 5000 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 250ndash999

employees and just 15 of organisations with

fewer than 50 employees12 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

39

42

9Fewer than 50

17

1650ndash249

21

29 250ndash999

1000ndash4999 47

61 More than 5000

62

10 40 50 60 70 80

2011

0 3020 Percentage

2010

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 professionalsspecialists

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

collaboration between industry and academic

institutions and more vocational training in order

to meet organisationsrsquo skill requirements

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

The proportion reporting their recruitment

problems are due to potential candidatesrsquo

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

lsquohangoverrsquo 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 yearrsquos findings this is particularly an

issue for the public sector (22) which is also more

likely to report the image of their sectoroccupation

is a problem (22)

Table 7 Organisations experiencing difficulties recruiting for one or more category of vacancy by organisation size ( of those that have had vacancies to fill)

Voluntary Manufacturing community

and Private sector and All 2011 production services Public services not-for-profit

Difficulty filling one or 75 88 77 66 62more vacancies

No difficulties experienced 25 12 23 34 38

Base 561

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RESOURCING AND TALENT PLANNING

Table 8 Categories of vacancy that proved particularly difficult to fill ( of respondents)

Voluntary community

Manufacturing Private and and sector Public not-for-

All 2011 production services services profit All 2010

Other managers and professionalsspecialists

34 41 33 27 34 37

Technical 30 53 29 20 16 28

Senior managers directors

14 13 16 10 16 16

Services (customer personal protective 7 6 8 3 5 5 and sales)

Administrative secretarial

4 3 4 4 4 3

Manualcraft workers 4 11 3 1 0 2

Other 6 5 3 10 11 4

No difficulties experienced

23 12 22 30 38 25

No vacancies to fill 6 3 7 10 1 6 Base 597 (2011) 468 (2010)

Voluntary community

Manufacturing Private and All and sector Public not-for- All

2011 production services services profit 2010

Table 9 Reasons for recruitment difficulties ()

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Lack of necessary specialist or technical skills 72 82 69 80 59 67

Look for more pay than you could offer 46 47 48 34 52 39

Lack of experience 40 42 43 27 41 36

Reluctance to move in current economic climate 19 24 18 17 15 26

Lack of interpersonal skills 16 9 19 10 20 12

No applicants 15 9 16 22 20 15

Image of sector occupationorganisation 13 7 12 22 11 12

Relocation difficulties 9 19 6 10 7 8

Lack of formal qualifications 7 7 7 5 7 4

The impact of the immigration cap 3 2 4 3 4

Other 4 3 3 8 7 7

Base 427 (2011) 330 (2010)

new item introduced in 2011

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 250ndash999 employees and one-

sixth of those with more than 5000 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

methods14 The public sector is most likely to

have introduced or extended flexible working

homeworking15 whereas the private sector is

more likely to have made efforts to improve its

brand through working with charities or corporate

sponsorship16 Voluntary community and not-forshy

profit organisations are most likely to have used

placement students to improve their brand17

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 organisationsrsquo 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 websites18

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 journalstrade press

Secondments are also deemed to be more effective

in these sectors than in the private sector

Table 10 Work undertaken over last year to improve employer brand ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Employee surveys 39 39 38 43

Developing online careers site 30 33 23 29

Introducingextending flexible working homeworking 24 20 39 29

Placement students 23 21 19 35

Graduate careers fairs 15 17 11 8

Working with charities 14 16 8 6

Corporate sponsorship 11 13 2 8

Introducing sabbaticals 3 4 1 5

Other 7 6 6 10

No action taken to improve employer brand 27 28 29 22

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Base 601

15

16

RESOURCING AND TALENT PLANNING

Table 11 Most effective methods for attracting applications by industry sector ()

Sector 2011 Number of UK employees 2011

All

2010

All

2011

Man

ufa

ctu

rin

gan

d p

rod

uct

ion

Priv

ate

sect

or

serv

ices

Pub

lic s

ervi

ces

Vo

lun

tary

co

mm

un

ity

and

no

t-fo

r-p

rofi

t

1ndash49

50ndash2

49

250ndash

999

100

0ndash4

999

Mo

re t

han

500

0

Own corporate website 63 59 44 57 77 66 42 55 57 77 79

Recruitment agencies 60 54 77 62 22 30 39 59 66 51 41

Local newspaper advertisements 36 32 38 23 41 51 28 35 35 29 29

Employee referral scheme 35 29 33 38 5 14 20 33 27 32 29

Commercial job boards 33 27 33 29 14 29 21 27 25 42 26

Specialist journalstrade press 31 27 24 23 30 43 26 23 32 32 24

Encourage speculative applicationsword of mouth 24 25 30 29 9 23 27 31 23 19 19

Jobcentre Plus 23 25 24 24 22 34 16 29 21 25 32

Professional networking (such as LinkedIn) 14 16 11 23 5 9 28 13 13 18 17

Search consultants 22 15 24 17 5 4 14 11 17 18 15

Links with schoolscollegesuniversities 18 13 16 13 9 17 12 13 11 18 15

Apprenticeships 12 11 19 9 13 9 10 10 11 12 17

National newspaper advertisements 16 11 4 6 23 29 10 9 15 10 15

Secondments 11 11 7 8 21 12 2 9 13 11 19

Links with other local organisations making redundancies 7 13 5 7 9 6 5 9 11 8

Alumni (previous employees) 5 5 6 7 2 1 7 2 6 11 3

Social networking sites (such as Facebook) 3 4 4 5 3 4 3 2 2 8 12

Local Employment Partnership (LEP) 6 3 1 4 2 5 1 2 3 4 9

Other 5 5 2 3 12 6 8 3 4 4 5

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Base 604 (2011) 464 (2010)

new item introduced in 2011

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

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 CVsapplication 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)

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-forshy

profit sector)

Table 12 Changes in attitudes to and relationships with recruitment partners over the past 12 months ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Not changed 36 34 40 39

Reduced use of recruitment partners 32 34 32 26

Formed a closer business partnership with them 19 23 8 12

Consider them an unnecessary expense 12 11 13 16

Consider them an unaffordable expense 11 10 11 22

Consider them integral to attracting top talent 9 11 2 4

Stopped using recruitment partners 6 5 8 5

Other 3 3 3 3 Base 604

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RESOURCING AND TALENT PLANNING

Table 13 Methods used to select applicants ()

2011 2010 2009 survey survey survey

Competency-based interviews 70 78 69

Interviews following contents of CVapplication form 63 64 68

Structured interviews (panel) 56 61 59

Tests for specific job-related skills 49 48 50

Telephone interviews 43 47 38

Literacy andor numeracy tests 38 43 39

Personalityaptitudepsychometric questionnaires 35 44 35

Assessment centres 35 42 35

Pre-application eliminationprogression question(s) 25 32 NA

General ability tests 23 27 44

Group exercises (for example role-playing) 21 30 26

Pre-interview references (academic or employment) 9 16 19

Video CVs 0 1 NA

Other 3 4 6

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Base 605 (2011) 473 (2010) 754 (2009)

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 1ndash49 employees use it

compared with 34 of organisations with 250ndash999

employees and 24 of organisations with more

than 5000 employees)20

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 strengths-

based 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

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

Recruitment costs 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

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

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 managerdirectors 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 managersdirectors than in the public or not-

for-profit sectors

Table 14 Criteria included in cost per hire calculations ()

Size ndash number of employees in UK

Advertising costs

Agencysearch costs

Employee referrals

Travel expenses

Relocation expenses

Fixed costs of resourcing team

Opportunity costs of hiring managers time

Other

Dont 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 (pound)

Median 2011 Median 2010 (no of (no of

Occupational group respondents) Minimum Maximum respondents)

Senior managersdirectors 7000 (219) 251 55000 8333 (234)

Other employees 2000 (246) 150 32000 2930 (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 (pound)

Voluntary

Median 2011 Manufacturing

and Private Public

community and not-for-

Occupational group production sector services profit

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Senior managersdirectors 7500 8000 9000 5000 3500

Other employees 2500 3400 2000 3000 1500 Base 150

19

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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 organisationsrsquo resourcing budgets for 2011ndash12

(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 inshy

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

2011 Changes in recruitment practices are also

anticipated More organisations plan to make use

of new mediatechnology 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 organisationsrsquo resourcing budgets ()

Private Public Voluntary community All sector services and not-for-profit

2011 2010 2011 2010 2011 2010 2011 2010

Reduced 49 53 41 51 82 59 51 61

Stayed about the same 36 37 39 40 14 36 40 34

Increased 8 7 11 4 1 5 4 5

Dont know 7 3 8 5 3 5 Base 615 (2011) 475 (2010)

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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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

cipd

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6

RESOURCING AND TALENT PLANNING

Diversity bull Overall in little change from previous years

just over half of organisations have a diversity

strategy rising to 90 of public sector

organisations

bull Our figures indicate a reduction in the use of

several methods to address diversity issues this

year particularly in the public sector which has

traditionally led the way in diversity practice

Labour turnover bull The median labour turnover rate has decreased

over the past few years (2011 125 2010

135 2009 157 2008 173)

bull Smaller organisations are most likely to report

that their labour turnover has increased and

larger organisations that it has decreased

bull 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 growthcuts in the

respective sectors

bull The proportion of organisations making ten

or more redundancies over the past year has

reduced from 33 in 2009 to 12 in 2010

Employee retention bull Only two-fifths (42) of organisations

experienced no difficulties in retaining staff

during 2010 a similar figure to the previous

year Managers and professionalsspecialists and

technical employees remain the most difficult

categories of staff to retain

bull Most organisations have taken one or more

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

bull The most frequently cited actions taken by

employers to address retention ndash improving

the people management skills of line managers

and increased learning and development

opportunities ndash 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

2011

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

Table 1 Organisations with formal resourcing strategies in place by size ()

Size ndash number of employees in UK 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

Fewer than 10 26

10ndash49 38

50ndash249 46

250ndash999 55

1000ndash4999 68

More than 5000 85

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Base 604

7

8

RESOURCING AND TALENT PLANNING

The number and nature of job vacancies There is considerable variation in the number

of vacancies respondentsrsquo organisations tried

to fill in 2010 partly because the number of

vacancies is strongly related to organisation size

(Table 2)2 Overall the median number of vacancies

has fallen from 30 in 2008 to 20 over the past two

years as the recession affected increasing numbers

of organisations (Table 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

(5000+ 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

Table 2 Median number of vacancies respondents tried to fill by size of organisation and sector

2011 survey 2010 survey 2009 survey

No of permanent staff employed in UK All Private

sector Public

services All Private sector

Public services All Private

sector Public

services

Median Median Median Median Median Median Median Median Median

1ndash49 3 3 1 3 3 2

50ndash249 12 12 10 12 10 14 10 10 8

250ndash999 45 50 30 46 45 50 60 52 70

1000ndash4999 110 150 55 100 100 100 300 300 300

More than 5000 200 500 150 550 850 500 800 800 550

All organisations 20 20 30 20 20 80 30 20 100 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 251ndash500

501ndash1000 1001ndash5000 5001ndash10000 10001+) 2009 categories have been combined where appropriate and otherwise matched with

the best corresponding category of 20112010

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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 organisations3 Public sector

organisations particularly those with more than

1000 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

Voluntary No of permanent staff community and not-employed in UK Private sector Public services for-profit All

Mean Mean Mean Mean

1ndash49 15 17 7 13

50ndash249 20 28 23 21

250ndash999 24 29 24 24

1000ndash4999 35 58 12 39

More than 5000 47 62 33 53

All organisations 25 45 19 27 Base 533

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 Same Less

Base 610

25

27

37

22

3837

50

32

50

23

31

28

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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

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

16ndash24-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

One in six organisations (17) report they are

employing more 16ndash24-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 16ndash24-year-olds being recruited (Table 4)

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Table 4 The employment of younger workers ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Percentage employing fewer 16ndash24-year-olds than one year ago

Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer 16ndash24-year-olds

Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer people

12 10 9 25 10

11 18 6 17 9

23 25 15 48 22

Base 605

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

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

5000 employees)9

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 programme11

Table 5 Activities organisations are considering ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Increasing apprenticeship schemes 30 48 24 33 27

Increasing your use of internships 22 27 23 12 27

Sponsoring students through university 10 20 8 12 1

Base 615

Table 6 Organisations operating a structured graduate recruitment programme by sector ()

2011 2010 2009 2008

All 27 34 22 23

Sector

Manufacturing and production 35 35 23 24

Private sector services 29 37 24 27

Voluntary community and not-for-profit 6 18 5 7

Public services 26 33 23 24

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Base 614 (2011) 472 (2010) 752 (2009)

11

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12

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 5000 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 250ndash999

employees and just 15 of organisations with

fewer than 50 employees12 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

39

42

9Fewer than 50

17

1650ndash249

21

29 250ndash999

1000ndash4999 47

61 More than 5000

62

10 40 50 60 70 80

2011

0 3020 Percentage

2010

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 professionalsspecialists

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

collaboration between industry and academic

institutions and more vocational training in order

to meet organisationsrsquo skill requirements

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

The proportion reporting their recruitment

problems are due to potential candidatesrsquo

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

lsquohangoverrsquo 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 yearrsquos findings this is particularly an

issue for the public sector (22) which is also more

likely to report the image of their sectoroccupation

is a problem (22)

Table 7 Organisations experiencing difficulties recruiting for one or more category of vacancy by organisation size ( of those that have had vacancies to fill)

Voluntary Manufacturing community

and Private sector and All 2011 production services Public services not-for-profit

Difficulty filling one or 75 88 77 66 62more vacancies

No difficulties experienced 25 12 23 34 38

Base 561

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RESOURCING AND TALENT PLANNING

Table 8 Categories of vacancy that proved particularly difficult to fill ( of respondents)

Voluntary community

Manufacturing Private and and sector Public not-for-

All 2011 production services services profit All 2010

Other managers and professionalsspecialists

34 41 33 27 34 37

Technical 30 53 29 20 16 28

Senior managers directors

14 13 16 10 16 16

Services (customer personal protective 7 6 8 3 5 5 and sales)

Administrative secretarial

4 3 4 4 4 3

Manualcraft workers 4 11 3 1 0 2

Other 6 5 3 10 11 4

No difficulties experienced

23 12 22 30 38 25

No vacancies to fill 6 3 7 10 1 6 Base 597 (2011) 468 (2010)

Voluntary community

Manufacturing Private and All and sector Public not-for- All

2011 production services services profit 2010

Table 9 Reasons for recruitment difficulties ()

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Lack of necessary specialist or technical skills 72 82 69 80 59 67

Look for more pay than you could offer 46 47 48 34 52 39

Lack of experience 40 42 43 27 41 36

Reluctance to move in current economic climate 19 24 18 17 15 26

Lack of interpersonal skills 16 9 19 10 20 12

No applicants 15 9 16 22 20 15

Image of sector occupationorganisation 13 7 12 22 11 12

Relocation difficulties 9 19 6 10 7 8

Lack of formal qualifications 7 7 7 5 7 4

The impact of the immigration cap 3 2 4 3 4

Other 4 3 3 8 7 7

Base 427 (2011) 330 (2010)

new item introduced in 2011

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 250ndash999 employees and one-

sixth of those with more than 5000 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

methods14 The public sector is most likely to

have introduced or extended flexible working

homeworking15 whereas the private sector is

more likely to have made efforts to improve its

brand through working with charities or corporate

sponsorship16 Voluntary community and not-forshy

profit organisations are most likely to have used

placement students to improve their brand17

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 organisationsrsquo 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 websites18

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 journalstrade press

Secondments are also deemed to be more effective

in these sectors than in the private sector

Table 10 Work undertaken over last year to improve employer brand ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Employee surveys 39 39 38 43

Developing online careers site 30 33 23 29

Introducingextending flexible working homeworking 24 20 39 29

Placement students 23 21 19 35

Graduate careers fairs 15 17 11 8

Working with charities 14 16 8 6

Corporate sponsorship 11 13 2 8

Introducing sabbaticals 3 4 1 5

Other 7 6 6 10

No action taken to improve employer brand 27 28 29 22

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Base 601

15

16

RESOURCING AND TALENT PLANNING

Table 11 Most effective methods for attracting applications by industry sector ()

Sector 2011 Number of UK employees 2011

All

2010

All

2011

Man

ufa

ctu

rin

gan

d p

rod

uct

ion

Priv

ate

sect

or

serv

ices

Pub

lic s

ervi

ces

Vo

lun

tary

co

mm

un

ity

and

no

t-fo

r-p

rofi

t

1ndash49

50ndash2

49

250ndash

999

100

0ndash4

999

Mo

re t

han

500

0

Own corporate website 63 59 44 57 77 66 42 55 57 77 79

Recruitment agencies 60 54 77 62 22 30 39 59 66 51 41

Local newspaper advertisements 36 32 38 23 41 51 28 35 35 29 29

Employee referral scheme 35 29 33 38 5 14 20 33 27 32 29

Commercial job boards 33 27 33 29 14 29 21 27 25 42 26

Specialist journalstrade press 31 27 24 23 30 43 26 23 32 32 24

Encourage speculative applicationsword of mouth 24 25 30 29 9 23 27 31 23 19 19

Jobcentre Plus 23 25 24 24 22 34 16 29 21 25 32

Professional networking (such as LinkedIn) 14 16 11 23 5 9 28 13 13 18 17

Search consultants 22 15 24 17 5 4 14 11 17 18 15

Links with schoolscollegesuniversities 18 13 16 13 9 17 12 13 11 18 15

Apprenticeships 12 11 19 9 13 9 10 10 11 12 17

National newspaper advertisements 16 11 4 6 23 29 10 9 15 10 15

Secondments 11 11 7 8 21 12 2 9 13 11 19

Links with other local organisations making redundancies 7 13 5 7 9 6 5 9 11 8

Alumni (previous employees) 5 5 6 7 2 1 7 2 6 11 3

Social networking sites (such as Facebook) 3 4 4 5 3 4 3 2 2 8 12

Local Employment Partnership (LEP) 6 3 1 4 2 5 1 2 3 4 9

Other 5 5 2 3 12 6 8 3 4 4 5

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Base 604 (2011) 464 (2010)

new item introduced in 2011

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

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 CVsapplication 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)

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-forshy

profit sector)

Table 12 Changes in attitudes to and relationships with recruitment partners over the past 12 months ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Not changed 36 34 40 39

Reduced use of recruitment partners 32 34 32 26

Formed a closer business partnership with them 19 23 8 12

Consider them an unnecessary expense 12 11 13 16

Consider them an unaffordable expense 11 10 11 22

Consider them integral to attracting top talent 9 11 2 4

Stopped using recruitment partners 6 5 8 5

Other 3 3 3 3 Base 604

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18

RESOURCING AND TALENT PLANNING

Table 13 Methods used to select applicants ()

2011 2010 2009 survey survey survey

Competency-based interviews 70 78 69

Interviews following contents of CVapplication form 63 64 68

Structured interviews (panel) 56 61 59

Tests for specific job-related skills 49 48 50

Telephone interviews 43 47 38

Literacy andor numeracy tests 38 43 39

Personalityaptitudepsychometric questionnaires 35 44 35

Assessment centres 35 42 35

Pre-application eliminationprogression question(s) 25 32 NA

General ability tests 23 27 44

Group exercises (for example role-playing) 21 30 26

Pre-interview references (academic or employment) 9 16 19

Video CVs 0 1 NA

Other 3 4 6

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Base 605 (2011) 473 (2010) 754 (2009)

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 1ndash49 employees use it

compared with 34 of organisations with 250ndash999

employees and 24 of organisations with more

than 5000 employees)20

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 strengths-

based 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

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

Recruitment costs 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

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

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 managerdirectors 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 managersdirectors than in the public or not-

for-profit sectors

Table 14 Criteria included in cost per hire calculations ()

Size ndash number of employees in UK

Advertising costs

Agencysearch costs

Employee referrals

Travel expenses

Relocation expenses

Fixed costs of resourcing team

Opportunity costs of hiring managers time

Other

Dont 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 (pound)

Median 2011 Median 2010 (no of (no of

Occupational group respondents) Minimum Maximum respondents)

Senior managersdirectors 7000 (219) 251 55000 8333 (234)

Other employees 2000 (246) 150 32000 2930 (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 (pound)

Voluntary

Median 2011 Manufacturing

and Private Public

community and not-for-

Occupational group production sector services profit

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Senior managersdirectors 7500 8000 9000 5000 3500

Other employees 2500 3400 2000 3000 1500 Base 150

19

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20

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 organisationsrsquo resourcing budgets for 2011ndash12

(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 inshy

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

2011 Changes in recruitment practices are also

anticipated More organisations plan to make use

of new mediatechnology 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 organisationsrsquo resourcing budgets ()

Private Public Voluntary community All sector services and not-for-profit

2011 2010 2011 2010 2011 2010 2011 2010

Reduced 49 53 41 51 82 59 51 61

Stayed about the same 36 37 39 40 14 36 40 34

Increased 8 7 11 4 1 5 4 5

Dont know 7 3 8 5 3 5 Base 615 (2011) 475 (2010)

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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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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23

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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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25

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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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27

28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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35

2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

cipd

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survey

2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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37

38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

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Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

2011

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

Table 1 Organisations with formal resourcing strategies in place by size ()

Size ndash number of employees in UK 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

Fewer than 10 26

10ndash49 38

50ndash249 46

250ndash999 55

1000ndash4999 68

More than 5000 85

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Base 604

7

8

RESOURCING AND TALENT PLANNING

The number and nature of job vacancies There is considerable variation in the number

of vacancies respondentsrsquo organisations tried

to fill in 2010 partly because the number of

vacancies is strongly related to organisation size

(Table 2)2 Overall the median number of vacancies

has fallen from 30 in 2008 to 20 over the past two

years as the recession affected increasing numbers

of organisations (Table 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

(5000+ 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

Table 2 Median number of vacancies respondents tried to fill by size of organisation and sector

2011 survey 2010 survey 2009 survey

No of permanent staff employed in UK All Private

sector Public

services All Private sector

Public services All Private

sector Public

services

Median Median Median Median Median Median Median Median Median

1ndash49 3 3 1 3 3 2

50ndash249 12 12 10 12 10 14 10 10 8

250ndash999 45 50 30 46 45 50 60 52 70

1000ndash4999 110 150 55 100 100 100 300 300 300

More than 5000 200 500 150 550 850 500 800 800 550

All organisations 20 20 30 20 20 80 30 20 100 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 251ndash500

501ndash1000 1001ndash5000 5001ndash10000 10001+) 2009 categories have been combined where appropriate and otherwise matched with

the best corresponding category of 20112010

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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 organisations3 Public sector

organisations particularly those with more than

1000 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

Voluntary No of permanent staff community and not-employed in UK Private sector Public services for-profit All

Mean Mean Mean Mean

1ndash49 15 17 7 13

50ndash249 20 28 23 21

250ndash999 24 29 24 24

1000ndash4999 35 58 12 39

More than 5000 47 62 33 53

All organisations 25 45 19 27 Base 533

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 Same Less

Base 610

25

27

37

22

3837

50

32

50

23

31

28

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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

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

16ndash24-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

One in six organisations (17) report they are

employing more 16ndash24-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 16ndash24-year-olds being recruited (Table 4)

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Table 4 The employment of younger workers ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Percentage employing fewer 16ndash24-year-olds than one year ago

Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer 16ndash24-year-olds

Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer people

12 10 9 25 10

11 18 6 17 9

23 25 15 48 22

Base 605

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

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

5000 employees)9

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 programme11

Table 5 Activities organisations are considering ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Increasing apprenticeship schemes 30 48 24 33 27

Increasing your use of internships 22 27 23 12 27

Sponsoring students through university 10 20 8 12 1

Base 615

Table 6 Organisations operating a structured graduate recruitment programme by sector ()

2011 2010 2009 2008

All 27 34 22 23

Sector

Manufacturing and production 35 35 23 24

Private sector services 29 37 24 27

Voluntary community and not-for-profit 6 18 5 7

Public services 26 33 23 24

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Base 614 (2011) 472 (2010) 752 (2009)

11

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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 5000 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 250ndash999

employees and just 15 of organisations with

fewer than 50 employees12 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

39

42

9Fewer than 50

17

1650ndash249

21

29 250ndash999

1000ndash4999 47

61 More than 5000

62

10 40 50 60 70 80

2011

0 3020 Percentage

2010

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 professionalsspecialists

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

collaboration between industry and academic

institutions and more vocational training in order

to meet organisationsrsquo skill requirements

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

The proportion reporting their recruitment

problems are due to potential candidatesrsquo

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

lsquohangoverrsquo 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 yearrsquos findings this is particularly an

issue for the public sector (22) which is also more

likely to report the image of their sectoroccupation

is a problem (22)

Table 7 Organisations experiencing difficulties recruiting for one or more category of vacancy by organisation size ( of those that have had vacancies to fill)

Voluntary Manufacturing community

and Private sector and All 2011 production services Public services not-for-profit

Difficulty filling one or 75 88 77 66 62more vacancies

No difficulties experienced 25 12 23 34 38

Base 561

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RESOURCING AND TALENT PLANNING

Table 8 Categories of vacancy that proved particularly difficult to fill ( of respondents)

Voluntary community

Manufacturing Private and and sector Public not-for-

All 2011 production services services profit All 2010

Other managers and professionalsspecialists

34 41 33 27 34 37

Technical 30 53 29 20 16 28

Senior managers directors

14 13 16 10 16 16

Services (customer personal protective 7 6 8 3 5 5 and sales)

Administrative secretarial

4 3 4 4 4 3

Manualcraft workers 4 11 3 1 0 2

Other 6 5 3 10 11 4

No difficulties experienced

23 12 22 30 38 25

No vacancies to fill 6 3 7 10 1 6 Base 597 (2011) 468 (2010)

Voluntary community

Manufacturing Private and All and sector Public not-for- All

2011 production services services profit 2010

Table 9 Reasons for recruitment difficulties ()

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Lack of necessary specialist or technical skills 72 82 69 80 59 67

Look for more pay than you could offer 46 47 48 34 52 39

Lack of experience 40 42 43 27 41 36

Reluctance to move in current economic climate 19 24 18 17 15 26

Lack of interpersonal skills 16 9 19 10 20 12

No applicants 15 9 16 22 20 15

Image of sector occupationorganisation 13 7 12 22 11 12

Relocation difficulties 9 19 6 10 7 8

Lack of formal qualifications 7 7 7 5 7 4

The impact of the immigration cap 3 2 4 3 4

Other 4 3 3 8 7 7

Base 427 (2011) 330 (2010)

new item introduced in 2011

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 250ndash999 employees and one-

sixth of those with more than 5000 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

methods14 The public sector is most likely to

have introduced or extended flexible working

homeworking15 whereas the private sector is

more likely to have made efforts to improve its

brand through working with charities or corporate

sponsorship16 Voluntary community and not-forshy

profit organisations are most likely to have used

placement students to improve their brand17

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 organisationsrsquo 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 websites18

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 journalstrade press

Secondments are also deemed to be more effective

in these sectors than in the private sector

Table 10 Work undertaken over last year to improve employer brand ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Employee surveys 39 39 38 43

Developing online careers site 30 33 23 29

Introducingextending flexible working homeworking 24 20 39 29

Placement students 23 21 19 35

Graduate careers fairs 15 17 11 8

Working with charities 14 16 8 6

Corporate sponsorship 11 13 2 8

Introducing sabbaticals 3 4 1 5

Other 7 6 6 10

No action taken to improve employer brand 27 28 29 22

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Base 601

15

16

RESOURCING AND TALENT PLANNING

Table 11 Most effective methods for attracting applications by industry sector ()

Sector 2011 Number of UK employees 2011

All

2010

All

2011

Man

ufa

ctu

rin

gan

d p

rod

uct

ion

Priv

ate

sect

or

serv

ices

Pub

lic s

ervi

ces

Vo

lun

tary

co

mm

un

ity

and

no

t-fo

r-p

rofi

t

1ndash49

50ndash2

49

250ndash

999

100

0ndash4

999

Mo

re t

han

500

0

Own corporate website 63 59 44 57 77 66 42 55 57 77 79

Recruitment agencies 60 54 77 62 22 30 39 59 66 51 41

Local newspaper advertisements 36 32 38 23 41 51 28 35 35 29 29

Employee referral scheme 35 29 33 38 5 14 20 33 27 32 29

Commercial job boards 33 27 33 29 14 29 21 27 25 42 26

Specialist journalstrade press 31 27 24 23 30 43 26 23 32 32 24

Encourage speculative applicationsword of mouth 24 25 30 29 9 23 27 31 23 19 19

Jobcentre Plus 23 25 24 24 22 34 16 29 21 25 32

Professional networking (such as LinkedIn) 14 16 11 23 5 9 28 13 13 18 17

Search consultants 22 15 24 17 5 4 14 11 17 18 15

Links with schoolscollegesuniversities 18 13 16 13 9 17 12 13 11 18 15

Apprenticeships 12 11 19 9 13 9 10 10 11 12 17

National newspaper advertisements 16 11 4 6 23 29 10 9 15 10 15

Secondments 11 11 7 8 21 12 2 9 13 11 19

Links with other local organisations making redundancies 7 13 5 7 9 6 5 9 11 8

Alumni (previous employees) 5 5 6 7 2 1 7 2 6 11 3

Social networking sites (such as Facebook) 3 4 4 5 3 4 3 2 2 8 12

Local Employment Partnership (LEP) 6 3 1 4 2 5 1 2 3 4 9

Other 5 5 2 3 12 6 8 3 4 4 5

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Base 604 (2011) 464 (2010)

new item introduced in 2011

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

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 CVsapplication 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)

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-forshy

profit sector)

Table 12 Changes in attitudes to and relationships with recruitment partners over the past 12 months ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Not changed 36 34 40 39

Reduced use of recruitment partners 32 34 32 26

Formed a closer business partnership with them 19 23 8 12

Consider them an unnecessary expense 12 11 13 16

Consider them an unaffordable expense 11 10 11 22

Consider them integral to attracting top talent 9 11 2 4

Stopped using recruitment partners 6 5 8 5

Other 3 3 3 3 Base 604

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RESOURCING AND TALENT PLANNING

Table 13 Methods used to select applicants ()

2011 2010 2009 survey survey survey

Competency-based interviews 70 78 69

Interviews following contents of CVapplication form 63 64 68

Structured interviews (panel) 56 61 59

Tests for specific job-related skills 49 48 50

Telephone interviews 43 47 38

Literacy andor numeracy tests 38 43 39

Personalityaptitudepsychometric questionnaires 35 44 35

Assessment centres 35 42 35

Pre-application eliminationprogression question(s) 25 32 NA

General ability tests 23 27 44

Group exercises (for example role-playing) 21 30 26

Pre-interview references (academic or employment) 9 16 19

Video CVs 0 1 NA

Other 3 4 6

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Base 605 (2011) 473 (2010) 754 (2009)

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 1ndash49 employees use it

compared with 34 of organisations with 250ndash999

employees and 24 of organisations with more

than 5000 employees)20

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 strengths-

based 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

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

Recruitment costs 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

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

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 managerdirectors 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 managersdirectors than in the public or not-

for-profit sectors

Table 14 Criteria included in cost per hire calculations ()

Size ndash number of employees in UK

Advertising costs

Agencysearch costs

Employee referrals

Travel expenses

Relocation expenses

Fixed costs of resourcing team

Opportunity costs of hiring managers time

Other

Dont 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 (pound)

Median 2011 Median 2010 (no of (no of

Occupational group respondents) Minimum Maximum respondents)

Senior managersdirectors 7000 (219) 251 55000 8333 (234)

Other employees 2000 (246) 150 32000 2930 (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 (pound)

Voluntary

Median 2011 Manufacturing

and Private Public

community and not-for-

Occupational group production sector services profit

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Senior managersdirectors 7500 8000 9000 5000 3500

Other employees 2500 3400 2000 3000 1500 Base 150

19

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20

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 organisationsrsquo resourcing budgets for 2011ndash12

(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 inshy

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

2011 Changes in recruitment practices are also

anticipated More organisations plan to make use

of new mediatechnology 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 organisationsrsquo resourcing budgets ()

Private Public Voluntary community All sector services and not-for-profit

2011 2010 2011 2010 2011 2010 2011 2010

Reduced 49 53 41 51 82 59 51 61

Stayed about the same 36 37 39 40 14 36 40 34

Increased 8 7 11 4 1 5 4 5

Dont know 7 3 8 5 3 5 Base 615 (2011) 475 (2010)

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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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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23

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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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25

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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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29

2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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31

32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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40

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

8

RESOURCING AND TALENT PLANNING

The number and nature of job vacancies There is considerable variation in the number

of vacancies respondentsrsquo organisations tried

to fill in 2010 partly because the number of

vacancies is strongly related to organisation size

(Table 2)2 Overall the median number of vacancies

has fallen from 30 in 2008 to 20 over the past two

years as the recession affected increasing numbers

of organisations (Table 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

(5000+ 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

Table 2 Median number of vacancies respondents tried to fill by size of organisation and sector

2011 survey 2010 survey 2009 survey

No of permanent staff employed in UK All Private

sector Public

services All Private sector

Public services All Private

sector Public

services

Median Median Median Median Median Median Median Median Median

1ndash49 3 3 1 3 3 2

50ndash249 12 12 10 12 10 14 10 10 8

250ndash999 45 50 30 46 45 50 60 52 70

1000ndash4999 110 150 55 100 100 100 300 300 300

More than 5000 200 500 150 550 850 500 800 800 550

All organisations 20 20 30 20 20 80 30 20 100 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 251ndash500

501ndash1000 1001ndash5000 5001ndash10000 10001+) 2009 categories have been combined where appropriate and otherwise matched with

the best corresponding category of 20112010

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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 organisations3 Public sector

organisations particularly those with more than

1000 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

Voluntary No of permanent staff community and not-employed in UK Private sector Public services for-profit All

Mean Mean Mean Mean

1ndash49 15 17 7 13

50ndash249 20 28 23 21

250ndash999 24 29 24 24

1000ndash4999 35 58 12 39

More than 5000 47 62 33 53

All organisations 25 45 19 27 Base 533

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 Same Less

Base 610

25

27

37

22

3837

50

32

50

23

31

28

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10

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

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

16ndash24-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

One in six organisations (17) report they are

employing more 16ndash24-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 16ndash24-year-olds being recruited (Table 4)

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Table 4 The employment of younger workers ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Percentage employing fewer 16ndash24-year-olds than one year ago

Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer 16ndash24-year-olds

Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer people

12 10 9 25 10

11 18 6 17 9

23 25 15 48 22

Base 605

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

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

5000 employees)9

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 programme11

Table 5 Activities organisations are considering ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Increasing apprenticeship schemes 30 48 24 33 27

Increasing your use of internships 22 27 23 12 27

Sponsoring students through university 10 20 8 12 1

Base 615

Table 6 Organisations operating a structured graduate recruitment programme by sector ()

2011 2010 2009 2008

All 27 34 22 23

Sector

Manufacturing and production 35 35 23 24

Private sector services 29 37 24 27

Voluntary community and not-for-profit 6 18 5 7

Public services 26 33 23 24

RESO

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Base 614 (2011) 472 (2010) 752 (2009)

11

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12

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 5000 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 250ndash999

employees and just 15 of organisations with

fewer than 50 employees12 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

39

42

9Fewer than 50

17

1650ndash249

21

29 250ndash999

1000ndash4999 47

61 More than 5000

62

10 40 50 60 70 80

2011

0 3020 Percentage

2010

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 professionalsspecialists

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

collaboration between industry and academic

institutions and more vocational training in order

to meet organisationsrsquo skill requirements

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

The proportion reporting their recruitment

problems are due to potential candidatesrsquo

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

lsquohangoverrsquo 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 yearrsquos findings this is particularly an

issue for the public sector (22) which is also more

likely to report the image of their sectoroccupation

is a problem (22)

Table 7 Organisations experiencing difficulties recruiting for one or more category of vacancy by organisation size ( of those that have had vacancies to fill)

Voluntary Manufacturing community

and Private sector and All 2011 production services Public services not-for-profit

Difficulty filling one or 75 88 77 66 62more vacancies

No difficulties experienced 25 12 23 34 38

Base 561

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14

RESOURCING AND TALENT PLANNING

Table 8 Categories of vacancy that proved particularly difficult to fill ( of respondents)

Voluntary community

Manufacturing Private and and sector Public not-for-

All 2011 production services services profit All 2010

Other managers and professionalsspecialists

34 41 33 27 34 37

Technical 30 53 29 20 16 28

Senior managers directors

14 13 16 10 16 16

Services (customer personal protective 7 6 8 3 5 5 and sales)

Administrative secretarial

4 3 4 4 4 3

Manualcraft workers 4 11 3 1 0 2

Other 6 5 3 10 11 4

No difficulties experienced

23 12 22 30 38 25

No vacancies to fill 6 3 7 10 1 6 Base 597 (2011) 468 (2010)

Voluntary community

Manufacturing Private and All and sector Public not-for- All

2011 production services services profit 2010

Table 9 Reasons for recruitment difficulties ()

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Lack of necessary specialist or technical skills 72 82 69 80 59 67

Look for more pay than you could offer 46 47 48 34 52 39

Lack of experience 40 42 43 27 41 36

Reluctance to move in current economic climate 19 24 18 17 15 26

Lack of interpersonal skills 16 9 19 10 20 12

No applicants 15 9 16 22 20 15

Image of sector occupationorganisation 13 7 12 22 11 12

Relocation difficulties 9 19 6 10 7 8

Lack of formal qualifications 7 7 7 5 7 4

The impact of the immigration cap 3 2 4 3 4

Other 4 3 3 8 7 7

Base 427 (2011) 330 (2010)

new item introduced in 2011

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 250ndash999 employees and one-

sixth of those with more than 5000 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

methods14 The public sector is most likely to

have introduced or extended flexible working

homeworking15 whereas the private sector is

more likely to have made efforts to improve its

brand through working with charities or corporate

sponsorship16 Voluntary community and not-forshy

profit organisations are most likely to have used

placement students to improve their brand17

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 organisationsrsquo 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 websites18

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 journalstrade press

Secondments are also deemed to be more effective

in these sectors than in the private sector

Table 10 Work undertaken over last year to improve employer brand ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Employee surveys 39 39 38 43

Developing online careers site 30 33 23 29

Introducingextending flexible working homeworking 24 20 39 29

Placement students 23 21 19 35

Graduate careers fairs 15 17 11 8

Working with charities 14 16 8 6

Corporate sponsorship 11 13 2 8

Introducing sabbaticals 3 4 1 5

Other 7 6 6 10

No action taken to improve employer brand 27 28 29 22

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Base 601

15

16

RESOURCING AND TALENT PLANNING

Table 11 Most effective methods for attracting applications by industry sector ()

Sector 2011 Number of UK employees 2011

All

2010

All

2011

Man

ufa

ctu

rin

gan

d p

rod

uct

ion

Priv

ate

sect

or

serv

ices

Pub

lic s

ervi

ces

Vo

lun

tary

co

mm

un

ity

and

no

t-fo

r-p

rofi

t

1ndash49

50ndash2

49

250ndash

999

100

0ndash4

999

Mo

re t

han

500

0

Own corporate website 63 59 44 57 77 66 42 55 57 77 79

Recruitment agencies 60 54 77 62 22 30 39 59 66 51 41

Local newspaper advertisements 36 32 38 23 41 51 28 35 35 29 29

Employee referral scheme 35 29 33 38 5 14 20 33 27 32 29

Commercial job boards 33 27 33 29 14 29 21 27 25 42 26

Specialist journalstrade press 31 27 24 23 30 43 26 23 32 32 24

Encourage speculative applicationsword of mouth 24 25 30 29 9 23 27 31 23 19 19

Jobcentre Plus 23 25 24 24 22 34 16 29 21 25 32

Professional networking (such as LinkedIn) 14 16 11 23 5 9 28 13 13 18 17

Search consultants 22 15 24 17 5 4 14 11 17 18 15

Links with schoolscollegesuniversities 18 13 16 13 9 17 12 13 11 18 15

Apprenticeships 12 11 19 9 13 9 10 10 11 12 17

National newspaper advertisements 16 11 4 6 23 29 10 9 15 10 15

Secondments 11 11 7 8 21 12 2 9 13 11 19

Links with other local organisations making redundancies 7 13 5 7 9 6 5 9 11 8

Alumni (previous employees) 5 5 6 7 2 1 7 2 6 11 3

Social networking sites (such as Facebook) 3 4 4 5 3 4 3 2 2 8 12

Local Employment Partnership (LEP) 6 3 1 4 2 5 1 2 3 4 9

Other 5 5 2 3 12 6 8 3 4 4 5

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Base 604 (2011) 464 (2010)

new item introduced in 2011

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

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 CVsapplication 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)

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-forshy

profit sector)

Table 12 Changes in attitudes to and relationships with recruitment partners over the past 12 months ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Not changed 36 34 40 39

Reduced use of recruitment partners 32 34 32 26

Formed a closer business partnership with them 19 23 8 12

Consider them an unnecessary expense 12 11 13 16

Consider them an unaffordable expense 11 10 11 22

Consider them integral to attracting top talent 9 11 2 4

Stopped using recruitment partners 6 5 8 5

Other 3 3 3 3 Base 604

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RESOURCING AND TALENT PLANNING

Table 13 Methods used to select applicants ()

2011 2010 2009 survey survey survey

Competency-based interviews 70 78 69

Interviews following contents of CVapplication form 63 64 68

Structured interviews (panel) 56 61 59

Tests for specific job-related skills 49 48 50

Telephone interviews 43 47 38

Literacy andor numeracy tests 38 43 39

Personalityaptitudepsychometric questionnaires 35 44 35

Assessment centres 35 42 35

Pre-application eliminationprogression question(s) 25 32 NA

General ability tests 23 27 44

Group exercises (for example role-playing) 21 30 26

Pre-interview references (academic or employment) 9 16 19

Video CVs 0 1 NA

Other 3 4 6

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Base 605 (2011) 473 (2010) 754 (2009)

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 1ndash49 employees use it

compared with 34 of organisations with 250ndash999

employees and 24 of organisations with more

than 5000 employees)20

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 strengths-

based 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

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

Recruitment costs 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

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

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 managerdirectors 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 managersdirectors than in the public or not-

for-profit sectors

Table 14 Criteria included in cost per hire calculations ()

Size ndash number of employees in UK

Advertising costs

Agencysearch costs

Employee referrals

Travel expenses

Relocation expenses

Fixed costs of resourcing team

Opportunity costs of hiring managers time

Other

Dont 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 (pound)

Median 2011 Median 2010 (no of (no of

Occupational group respondents) Minimum Maximum respondents)

Senior managersdirectors 7000 (219) 251 55000 8333 (234)

Other employees 2000 (246) 150 32000 2930 (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 (pound)

Voluntary

Median 2011 Manufacturing

and Private Public

community and not-for-

Occupational group production sector services profit

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Senior managersdirectors 7500 8000 9000 5000 3500

Other employees 2500 3400 2000 3000 1500 Base 150

19

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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 organisationsrsquo resourcing budgets for 2011ndash12

(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 inshy

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

2011 Changes in recruitment practices are also

anticipated More organisations plan to make use

of new mediatechnology 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 organisationsrsquo resourcing budgets ()

Private Public Voluntary community All sector services and not-for-profit

2011 2010 2011 2010 2011 2010 2011 2010

Reduced 49 53 41 51 82 59 51 61

Stayed about the same 36 37 39 40 14 36 40 34

Increased 8 7 11 4 1 5 4 5

Dont know 7 3 8 5 3 5 Base 615 (2011) 475 (2010)

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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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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31

32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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40

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

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 organisations3 Public sector

organisations particularly those with more than

1000 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

Voluntary No of permanent staff community and not-employed in UK Private sector Public services for-profit All

Mean Mean Mean Mean

1ndash49 15 17 7 13

50ndash249 20 28 23 21

250ndash999 24 29 24 24

1000ndash4999 35 58 12 39

More than 5000 47 62 33 53

All organisations 25 45 19 27 Base 533

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 Same Less

Base 610

25

27

37

22

3837

50

32

50

23

31

28

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9

10

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

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

16ndash24-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

One in six organisations (17) report they are

employing more 16ndash24-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 16ndash24-year-olds being recruited (Table 4)

cipd

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Table 4 The employment of younger workers ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Percentage employing fewer 16ndash24-year-olds than one year ago

Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer 16ndash24-year-olds

Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer people

12 10 9 25 10

11 18 6 17 9

23 25 15 48 22

Base 605

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

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

5000 employees)9

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 programme11

Table 5 Activities organisations are considering ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Increasing apprenticeship schemes 30 48 24 33 27

Increasing your use of internships 22 27 23 12 27

Sponsoring students through university 10 20 8 12 1

Base 615

Table 6 Organisations operating a structured graduate recruitment programme by sector ()

2011 2010 2009 2008

All 27 34 22 23

Sector

Manufacturing and production 35 35 23 24

Private sector services 29 37 24 27

Voluntary community and not-for-profit 6 18 5 7

Public services 26 33 23 24

RESO

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Base 614 (2011) 472 (2010) 752 (2009)

11

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12

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 5000 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 250ndash999

employees and just 15 of organisations with

fewer than 50 employees12 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

39

42

9Fewer than 50

17

1650ndash249

21

29 250ndash999

1000ndash4999 47

61 More than 5000

62

10 40 50 60 70 80

2011

0 3020 Percentage

2010

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 professionalsspecialists

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

collaboration between industry and academic

institutions and more vocational training in order

to meet organisationsrsquo skill requirements

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

The proportion reporting their recruitment

problems are due to potential candidatesrsquo

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

lsquohangoverrsquo 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 yearrsquos findings this is particularly an

issue for the public sector (22) which is also more

likely to report the image of their sectoroccupation

is a problem (22)

Table 7 Organisations experiencing difficulties recruiting for one or more category of vacancy by organisation size ( of those that have had vacancies to fill)

Voluntary Manufacturing community

and Private sector and All 2011 production services Public services not-for-profit

Difficulty filling one or 75 88 77 66 62more vacancies

No difficulties experienced 25 12 23 34 38

Base 561

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14

RESOURCING AND TALENT PLANNING

Table 8 Categories of vacancy that proved particularly difficult to fill ( of respondents)

Voluntary community

Manufacturing Private and and sector Public not-for-

All 2011 production services services profit All 2010

Other managers and professionalsspecialists

34 41 33 27 34 37

Technical 30 53 29 20 16 28

Senior managers directors

14 13 16 10 16 16

Services (customer personal protective 7 6 8 3 5 5 and sales)

Administrative secretarial

4 3 4 4 4 3

Manualcraft workers 4 11 3 1 0 2

Other 6 5 3 10 11 4

No difficulties experienced

23 12 22 30 38 25

No vacancies to fill 6 3 7 10 1 6 Base 597 (2011) 468 (2010)

Voluntary community

Manufacturing Private and All and sector Public not-for- All

2011 production services services profit 2010

Table 9 Reasons for recruitment difficulties ()

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Lack of necessary specialist or technical skills 72 82 69 80 59 67

Look for more pay than you could offer 46 47 48 34 52 39

Lack of experience 40 42 43 27 41 36

Reluctance to move in current economic climate 19 24 18 17 15 26

Lack of interpersonal skills 16 9 19 10 20 12

No applicants 15 9 16 22 20 15

Image of sector occupationorganisation 13 7 12 22 11 12

Relocation difficulties 9 19 6 10 7 8

Lack of formal qualifications 7 7 7 5 7 4

The impact of the immigration cap 3 2 4 3 4

Other 4 3 3 8 7 7

Base 427 (2011) 330 (2010)

new item introduced in 2011

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 250ndash999 employees and one-

sixth of those with more than 5000 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

methods14 The public sector is most likely to

have introduced or extended flexible working

homeworking15 whereas the private sector is

more likely to have made efforts to improve its

brand through working with charities or corporate

sponsorship16 Voluntary community and not-forshy

profit organisations are most likely to have used

placement students to improve their brand17

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 organisationsrsquo 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 websites18

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 journalstrade press

Secondments are also deemed to be more effective

in these sectors than in the private sector

Table 10 Work undertaken over last year to improve employer brand ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Employee surveys 39 39 38 43

Developing online careers site 30 33 23 29

Introducingextending flexible working homeworking 24 20 39 29

Placement students 23 21 19 35

Graduate careers fairs 15 17 11 8

Working with charities 14 16 8 6

Corporate sponsorship 11 13 2 8

Introducing sabbaticals 3 4 1 5

Other 7 6 6 10

No action taken to improve employer brand 27 28 29 22

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Base 601

15

16

RESOURCING AND TALENT PLANNING

Table 11 Most effective methods for attracting applications by industry sector ()

Sector 2011 Number of UK employees 2011

All

2010

All

2011

Man

ufa

ctu

rin

gan

d p

rod

uct

ion

Priv

ate

sect

or

serv

ices

Pub

lic s

ervi

ces

Vo

lun

tary

co

mm

un

ity

and

no

t-fo

r-p

rofi

t

1ndash49

50ndash2

49

250ndash

999

100

0ndash4

999

Mo

re t

han

500

0

Own corporate website 63 59 44 57 77 66 42 55 57 77 79

Recruitment agencies 60 54 77 62 22 30 39 59 66 51 41

Local newspaper advertisements 36 32 38 23 41 51 28 35 35 29 29

Employee referral scheme 35 29 33 38 5 14 20 33 27 32 29

Commercial job boards 33 27 33 29 14 29 21 27 25 42 26

Specialist journalstrade press 31 27 24 23 30 43 26 23 32 32 24

Encourage speculative applicationsword of mouth 24 25 30 29 9 23 27 31 23 19 19

Jobcentre Plus 23 25 24 24 22 34 16 29 21 25 32

Professional networking (such as LinkedIn) 14 16 11 23 5 9 28 13 13 18 17

Search consultants 22 15 24 17 5 4 14 11 17 18 15

Links with schoolscollegesuniversities 18 13 16 13 9 17 12 13 11 18 15

Apprenticeships 12 11 19 9 13 9 10 10 11 12 17

National newspaper advertisements 16 11 4 6 23 29 10 9 15 10 15

Secondments 11 11 7 8 21 12 2 9 13 11 19

Links with other local organisations making redundancies 7 13 5 7 9 6 5 9 11 8

Alumni (previous employees) 5 5 6 7 2 1 7 2 6 11 3

Social networking sites (such as Facebook) 3 4 4 5 3 4 3 2 2 8 12

Local Employment Partnership (LEP) 6 3 1 4 2 5 1 2 3 4 9

Other 5 5 2 3 12 6 8 3 4 4 5

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Base 604 (2011) 464 (2010)

new item introduced in 2011

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

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 CVsapplication 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)

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-forshy

profit sector)

Table 12 Changes in attitudes to and relationships with recruitment partners over the past 12 months ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Not changed 36 34 40 39

Reduced use of recruitment partners 32 34 32 26

Formed a closer business partnership with them 19 23 8 12

Consider them an unnecessary expense 12 11 13 16

Consider them an unaffordable expense 11 10 11 22

Consider them integral to attracting top talent 9 11 2 4

Stopped using recruitment partners 6 5 8 5

Other 3 3 3 3 Base 604

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18

RESOURCING AND TALENT PLANNING

Table 13 Methods used to select applicants ()

2011 2010 2009 survey survey survey

Competency-based interviews 70 78 69

Interviews following contents of CVapplication form 63 64 68

Structured interviews (panel) 56 61 59

Tests for specific job-related skills 49 48 50

Telephone interviews 43 47 38

Literacy andor numeracy tests 38 43 39

Personalityaptitudepsychometric questionnaires 35 44 35

Assessment centres 35 42 35

Pre-application eliminationprogression question(s) 25 32 NA

General ability tests 23 27 44

Group exercises (for example role-playing) 21 30 26

Pre-interview references (academic or employment) 9 16 19

Video CVs 0 1 NA

Other 3 4 6

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Base 605 (2011) 473 (2010) 754 (2009)

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 1ndash49 employees use it

compared with 34 of organisations with 250ndash999

employees and 24 of organisations with more

than 5000 employees)20

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 strengths-

based 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

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

Recruitment costs 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

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

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 managerdirectors 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 managersdirectors than in the public or not-

for-profit sectors

Table 14 Criteria included in cost per hire calculations ()

Size ndash number of employees in UK

Advertising costs

Agencysearch costs

Employee referrals

Travel expenses

Relocation expenses

Fixed costs of resourcing team

Opportunity costs of hiring managers time

Other

Dont 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 (pound)

Median 2011 Median 2010 (no of (no of

Occupational group respondents) Minimum Maximum respondents)

Senior managersdirectors 7000 (219) 251 55000 8333 (234)

Other employees 2000 (246) 150 32000 2930 (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 (pound)

Voluntary

Median 2011 Manufacturing

and Private Public

community and not-for-

Occupational group production sector services profit

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Senior managersdirectors 7500 8000 9000 5000 3500

Other employees 2500 3400 2000 3000 1500 Base 150

19

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20

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 organisationsrsquo resourcing budgets for 2011ndash12

(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 inshy

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

2011 Changes in recruitment practices are also

anticipated More organisations plan to make use

of new mediatechnology 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 organisationsrsquo resourcing budgets ()

Private Public Voluntary community All sector services and not-for-profit

2011 2010 2011 2010 2011 2010 2011 2010

Reduced 49 53 41 51 82 59 51 61

Stayed about the same 36 37 39 40 14 36 40 34

Increased 8 7 11 4 1 5 4 5

Dont know 7 3 8 5 3 5 Base 615 (2011) 475 (2010)

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22

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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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23

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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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25

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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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40

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

10

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

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

16ndash24-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

One in six organisations (17) report they are

employing more 16ndash24-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 16ndash24-year-olds being recruited (Table 4)

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Table 4 The employment of younger workers ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Percentage employing fewer 16ndash24-year-olds than one year ago

Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer 16ndash24-year-olds

Percentage agreeing the abolition of the Default Retirement Age means they will recruit fewer people

12 10 9 25 10

11 18 6 17 9

23 25 15 48 22

Base 605

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

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

5000 employees)9

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 programme11

Table 5 Activities organisations are considering ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Increasing apprenticeship schemes 30 48 24 33 27

Increasing your use of internships 22 27 23 12 27

Sponsoring students through university 10 20 8 12 1

Base 615

Table 6 Organisations operating a structured graduate recruitment programme by sector ()

2011 2010 2009 2008

All 27 34 22 23

Sector

Manufacturing and production 35 35 23 24

Private sector services 29 37 24 27

Voluntary community and not-for-profit 6 18 5 7

Public services 26 33 23 24

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Base 614 (2011) 472 (2010) 752 (2009)

11

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12

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 5000 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 250ndash999

employees and just 15 of organisations with

fewer than 50 employees12 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

39

42

9Fewer than 50

17

1650ndash249

21

29 250ndash999

1000ndash4999 47

61 More than 5000

62

10 40 50 60 70 80

2011

0 3020 Percentage

2010

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 professionalsspecialists

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

collaboration between industry and academic

institutions and more vocational training in order

to meet organisationsrsquo skill requirements

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

The proportion reporting their recruitment

problems are due to potential candidatesrsquo

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

lsquohangoverrsquo 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 yearrsquos findings this is particularly an

issue for the public sector (22) which is also more

likely to report the image of their sectoroccupation

is a problem (22)

Table 7 Organisations experiencing difficulties recruiting for one or more category of vacancy by organisation size ( of those that have had vacancies to fill)

Voluntary Manufacturing community

and Private sector and All 2011 production services Public services not-for-profit

Difficulty filling one or 75 88 77 66 62more vacancies

No difficulties experienced 25 12 23 34 38

Base 561

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RESOURCING AND TALENT PLANNING

Table 8 Categories of vacancy that proved particularly difficult to fill ( of respondents)

Voluntary community

Manufacturing Private and and sector Public not-for-

All 2011 production services services profit All 2010

Other managers and professionalsspecialists

34 41 33 27 34 37

Technical 30 53 29 20 16 28

Senior managers directors

14 13 16 10 16 16

Services (customer personal protective 7 6 8 3 5 5 and sales)

Administrative secretarial

4 3 4 4 4 3

Manualcraft workers 4 11 3 1 0 2

Other 6 5 3 10 11 4

No difficulties experienced

23 12 22 30 38 25

No vacancies to fill 6 3 7 10 1 6 Base 597 (2011) 468 (2010)

Voluntary community

Manufacturing Private and All and sector Public not-for- All

2011 production services services profit 2010

Table 9 Reasons for recruitment difficulties ()

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Lack of necessary specialist or technical skills 72 82 69 80 59 67

Look for more pay than you could offer 46 47 48 34 52 39

Lack of experience 40 42 43 27 41 36

Reluctance to move in current economic climate 19 24 18 17 15 26

Lack of interpersonal skills 16 9 19 10 20 12

No applicants 15 9 16 22 20 15

Image of sector occupationorganisation 13 7 12 22 11 12

Relocation difficulties 9 19 6 10 7 8

Lack of formal qualifications 7 7 7 5 7 4

The impact of the immigration cap 3 2 4 3 4

Other 4 3 3 8 7 7

Base 427 (2011) 330 (2010)

new item introduced in 2011

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 250ndash999 employees and one-

sixth of those with more than 5000 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

methods14 The public sector is most likely to

have introduced or extended flexible working

homeworking15 whereas the private sector is

more likely to have made efforts to improve its

brand through working with charities or corporate

sponsorship16 Voluntary community and not-forshy

profit organisations are most likely to have used

placement students to improve their brand17

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 organisationsrsquo 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 websites18

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 journalstrade press

Secondments are also deemed to be more effective

in these sectors than in the private sector

Table 10 Work undertaken over last year to improve employer brand ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Employee surveys 39 39 38 43

Developing online careers site 30 33 23 29

Introducingextending flexible working homeworking 24 20 39 29

Placement students 23 21 19 35

Graduate careers fairs 15 17 11 8

Working with charities 14 16 8 6

Corporate sponsorship 11 13 2 8

Introducing sabbaticals 3 4 1 5

Other 7 6 6 10

No action taken to improve employer brand 27 28 29 22

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Base 601

15

16

RESOURCING AND TALENT PLANNING

Table 11 Most effective methods for attracting applications by industry sector ()

Sector 2011 Number of UK employees 2011

All

2010

All

2011

Man

ufa

ctu

rin

gan

d p

rod

uct

ion

Priv

ate

sect

or

serv

ices

Pub

lic s

ervi

ces

Vo

lun

tary

co

mm

un

ity

and

no

t-fo

r-p

rofi

t

1ndash49

50ndash2

49

250ndash

999

100

0ndash4

999

Mo

re t

han

500

0

Own corporate website 63 59 44 57 77 66 42 55 57 77 79

Recruitment agencies 60 54 77 62 22 30 39 59 66 51 41

Local newspaper advertisements 36 32 38 23 41 51 28 35 35 29 29

Employee referral scheme 35 29 33 38 5 14 20 33 27 32 29

Commercial job boards 33 27 33 29 14 29 21 27 25 42 26

Specialist journalstrade press 31 27 24 23 30 43 26 23 32 32 24

Encourage speculative applicationsword of mouth 24 25 30 29 9 23 27 31 23 19 19

Jobcentre Plus 23 25 24 24 22 34 16 29 21 25 32

Professional networking (such as LinkedIn) 14 16 11 23 5 9 28 13 13 18 17

Search consultants 22 15 24 17 5 4 14 11 17 18 15

Links with schoolscollegesuniversities 18 13 16 13 9 17 12 13 11 18 15

Apprenticeships 12 11 19 9 13 9 10 10 11 12 17

National newspaper advertisements 16 11 4 6 23 29 10 9 15 10 15

Secondments 11 11 7 8 21 12 2 9 13 11 19

Links with other local organisations making redundancies 7 13 5 7 9 6 5 9 11 8

Alumni (previous employees) 5 5 6 7 2 1 7 2 6 11 3

Social networking sites (such as Facebook) 3 4 4 5 3 4 3 2 2 8 12

Local Employment Partnership (LEP) 6 3 1 4 2 5 1 2 3 4 9

Other 5 5 2 3 12 6 8 3 4 4 5

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Base 604 (2011) 464 (2010)

new item introduced in 2011

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

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 CVsapplication 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)

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-forshy

profit sector)

Table 12 Changes in attitudes to and relationships with recruitment partners over the past 12 months ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Not changed 36 34 40 39

Reduced use of recruitment partners 32 34 32 26

Formed a closer business partnership with them 19 23 8 12

Consider them an unnecessary expense 12 11 13 16

Consider them an unaffordable expense 11 10 11 22

Consider them integral to attracting top talent 9 11 2 4

Stopped using recruitment partners 6 5 8 5

Other 3 3 3 3 Base 604

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18

RESOURCING AND TALENT PLANNING

Table 13 Methods used to select applicants ()

2011 2010 2009 survey survey survey

Competency-based interviews 70 78 69

Interviews following contents of CVapplication form 63 64 68

Structured interviews (panel) 56 61 59

Tests for specific job-related skills 49 48 50

Telephone interviews 43 47 38

Literacy andor numeracy tests 38 43 39

Personalityaptitudepsychometric questionnaires 35 44 35

Assessment centres 35 42 35

Pre-application eliminationprogression question(s) 25 32 NA

General ability tests 23 27 44

Group exercises (for example role-playing) 21 30 26

Pre-interview references (academic or employment) 9 16 19

Video CVs 0 1 NA

Other 3 4 6

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Base 605 (2011) 473 (2010) 754 (2009)

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 1ndash49 employees use it

compared with 34 of organisations with 250ndash999

employees and 24 of organisations with more

than 5000 employees)20

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 strengths-

based 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

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

Recruitment costs 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

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

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 managerdirectors 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 managersdirectors than in the public or not-

for-profit sectors

Table 14 Criteria included in cost per hire calculations ()

Size ndash number of employees in UK

Advertising costs

Agencysearch costs

Employee referrals

Travel expenses

Relocation expenses

Fixed costs of resourcing team

Opportunity costs of hiring managers time

Other

Dont 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 (pound)

Median 2011 Median 2010 (no of (no of

Occupational group respondents) Minimum Maximum respondents)

Senior managersdirectors 7000 (219) 251 55000 8333 (234)

Other employees 2000 (246) 150 32000 2930 (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 (pound)

Voluntary

Median 2011 Manufacturing

and Private Public

community and not-for-

Occupational group production sector services profit

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Senior managersdirectors 7500 8000 9000 5000 3500

Other employees 2500 3400 2000 3000 1500 Base 150

19

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20

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 organisationsrsquo resourcing budgets for 2011ndash12

(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 inshy

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

2011 Changes in recruitment practices are also

anticipated More organisations plan to make use

of new mediatechnology 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 organisationsrsquo resourcing budgets ()

Private Public Voluntary community All sector services and not-for-profit

2011 2010 2011 2010 2011 2010 2011 2010

Reduced 49 53 41 51 82 59 51 61

Stayed about the same 36 37 39 40 14 36 40 34

Increased 8 7 11 4 1 5 4 5

Dont know 7 3 8 5 3 5 Base 615 (2011) 475 (2010)

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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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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23

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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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25

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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

cipd

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

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

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

5000 employees)9

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 programme11

Table 5 Activities organisations are considering ()

Voluntary Manufacturing community

All and Private sector and respondents production services Public services not-for-profit

Increasing apprenticeship schemes 30 48 24 33 27

Increasing your use of internships 22 27 23 12 27

Sponsoring students through university 10 20 8 12 1

Base 615

Table 6 Organisations operating a structured graduate recruitment programme by sector ()

2011 2010 2009 2008

All 27 34 22 23

Sector

Manufacturing and production 35 35 23 24

Private sector services 29 37 24 27

Voluntary community and not-for-profit 6 18 5 7

Public services 26 33 23 24

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Base 614 (2011) 472 (2010) 752 (2009)

11

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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 5000 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 250ndash999

employees and just 15 of organisations with

fewer than 50 employees12 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

39

42

9Fewer than 50

17

1650ndash249

21

29 250ndash999

1000ndash4999 47

61 More than 5000

62

10 40 50 60 70 80

2011

0 3020 Percentage

2010

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 professionalsspecialists

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

collaboration between industry and academic

institutions and more vocational training in order

to meet organisationsrsquo skill requirements

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

The proportion reporting their recruitment

problems are due to potential candidatesrsquo

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

lsquohangoverrsquo 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 yearrsquos findings this is particularly an

issue for the public sector (22) which is also more

likely to report the image of their sectoroccupation

is a problem (22)

Table 7 Organisations experiencing difficulties recruiting for one or more category of vacancy by organisation size ( of those that have had vacancies to fill)

Voluntary Manufacturing community

and Private sector and All 2011 production services Public services not-for-profit

Difficulty filling one or 75 88 77 66 62more vacancies

No difficulties experienced 25 12 23 34 38

Base 561

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14

RESOURCING AND TALENT PLANNING

Table 8 Categories of vacancy that proved particularly difficult to fill ( of respondents)

Voluntary community

Manufacturing Private and and sector Public not-for-

All 2011 production services services profit All 2010

Other managers and professionalsspecialists

34 41 33 27 34 37

Technical 30 53 29 20 16 28

Senior managers directors

14 13 16 10 16 16

Services (customer personal protective 7 6 8 3 5 5 and sales)

Administrative secretarial

4 3 4 4 4 3

Manualcraft workers 4 11 3 1 0 2

Other 6 5 3 10 11 4

No difficulties experienced

23 12 22 30 38 25

No vacancies to fill 6 3 7 10 1 6 Base 597 (2011) 468 (2010)

Voluntary community

Manufacturing Private and All and sector Public not-for- All

2011 production services services profit 2010

Table 9 Reasons for recruitment difficulties ()

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Lack of necessary specialist or technical skills 72 82 69 80 59 67

Look for more pay than you could offer 46 47 48 34 52 39

Lack of experience 40 42 43 27 41 36

Reluctance to move in current economic climate 19 24 18 17 15 26

Lack of interpersonal skills 16 9 19 10 20 12

No applicants 15 9 16 22 20 15

Image of sector occupationorganisation 13 7 12 22 11 12

Relocation difficulties 9 19 6 10 7 8

Lack of formal qualifications 7 7 7 5 7 4

The impact of the immigration cap 3 2 4 3 4

Other 4 3 3 8 7 7

Base 427 (2011) 330 (2010)

new item introduced in 2011

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 250ndash999 employees and one-

sixth of those with more than 5000 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

methods14 The public sector is most likely to

have introduced or extended flexible working

homeworking15 whereas the private sector is

more likely to have made efforts to improve its

brand through working with charities or corporate

sponsorship16 Voluntary community and not-forshy

profit organisations are most likely to have used

placement students to improve their brand17

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 organisationsrsquo 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 websites18

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 journalstrade press

Secondments are also deemed to be more effective

in these sectors than in the private sector

Table 10 Work undertaken over last year to improve employer brand ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Employee surveys 39 39 38 43

Developing online careers site 30 33 23 29

Introducingextending flexible working homeworking 24 20 39 29

Placement students 23 21 19 35

Graduate careers fairs 15 17 11 8

Working with charities 14 16 8 6

Corporate sponsorship 11 13 2 8

Introducing sabbaticals 3 4 1 5

Other 7 6 6 10

No action taken to improve employer brand 27 28 29 22

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15

16

RESOURCING AND TALENT PLANNING

Table 11 Most effective methods for attracting applications by industry sector ()

Sector 2011 Number of UK employees 2011

All

2010

All

2011

Man

ufa

ctu

rin

gan

d p

rod

uct

ion

Priv

ate

sect

or

serv

ices

Pub

lic s

ervi

ces

Vo

lun

tary

co

mm

un

ity

and

no

t-fo

r-p

rofi

t

1ndash49

50ndash2

49

250ndash

999

100

0ndash4

999

Mo

re t

han

500

0

Own corporate website 63 59 44 57 77 66 42 55 57 77 79

Recruitment agencies 60 54 77 62 22 30 39 59 66 51 41

Local newspaper advertisements 36 32 38 23 41 51 28 35 35 29 29

Employee referral scheme 35 29 33 38 5 14 20 33 27 32 29

Commercial job boards 33 27 33 29 14 29 21 27 25 42 26

Specialist journalstrade press 31 27 24 23 30 43 26 23 32 32 24

Encourage speculative applicationsword of mouth 24 25 30 29 9 23 27 31 23 19 19

Jobcentre Plus 23 25 24 24 22 34 16 29 21 25 32

Professional networking (such as LinkedIn) 14 16 11 23 5 9 28 13 13 18 17

Search consultants 22 15 24 17 5 4 14 11 17 18 15

Links with schoolscollegesuniversities 18 13 16 13 9 17 12 13 11 18 15

Apprenticeships 12 11 19 9 13 9 10 10 11 12 17

National newspaper advertisements 16 11 4 6 23 29 10 9 15 10 15

Secondments 11 11 7 8 21 12 2 9 13 11 19

Links with other local organisations making redundancies 7 13 5 7 9 6 5 9 11 8

Alumni (previous employees) 5 5 6 7 2 1 7 2 6 11 3

Social networking sites (such as Facebook) 3 4 4 5 3 4 3 2 2 8 12

Local Employment Partnership (LEP) 6 3 1 4 2 5 1 2 3 4 9

Other 5 5 2 3 12 6 8 3 4 4 5

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Base 604 (2011) 464 (2010)

new item introduced in 2011

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

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 CVsapplication 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)

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-forshy

profit sector)

Table 12 Changes in attitudes to and relationships with recruitment partners over the past 12 months ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Not changed 36 34 40 39

Reduced use of recruitment partners 32 34 32 26

Formed a closer business partnership with them 19 23 8 12

Consider them an unnecessary expense 12 11 13 16

Consider them an unaffordable expense 11 10 11 22

Consider them integral to attracting top talent 9 11 2 4

Stopped using recruitment partners 6 5 8 5

Other 3 3 3 3 Base 604

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RESOURCING AND TALENT PLANNING

Table 13 Methods used to select applicants ()

2011 2010 2009 survey survey survey

Competency-based interviews 70 78 69

Interviews following contents of CVapplication form 63 64 68

Structured interviews (panel) 56 61 59

Tests for specific job-related skills 49 48 50

Telephone interviews 43 47 38

Literacy andor numeracy tests 38 43 39

Personalityaptitudepsychometric questionnaires 35 44 35

Assessment centres 35 42 35

Pre-application eliminationprogression question(s) 25 32 NA

General ability tests 23 27 44

Group exercises (for example role-playing) 21 30 26

Pre-interview references (academic or employment) 9 16 19

Video CVs 0 1 NA

Other 3 4 6

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Base 605 (2011) 473 (2010) 754 (2009)

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 1ndash49 employees use it

compared with 34 of organisations with 250ndash999

employees and 24 of organisations with more

than 5000 employees)20

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 strengths-

based 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

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

Recruitment costs 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

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

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 managerdirectors 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 managersdirectors than in the public or not-

for-profit sectors

Table 14 Criteria included in cost per hire calculations ()

Size ndash number of employees in UK

Advertising costs

Agencysearch costs

Employee referrals

Travel expenses

Relocation expenses

Fixed costs of resourcing team

Opportunity costs of hiring managers time

Other

Dont 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 (pound)

Median 2011 Median 2010 (no of (no of

Occupational group respondents) Minimum Maximum respondents)

Senior managersdirectors 7000 (219) 251 55000 8333 (234)

Other employees 2000 (246) 150 32000 2930 (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 (pound)

Voluntary

Median 2011 Manufacturing

and Private Public

community and not-for-

Occupational group production sector services profit

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Senior managersdirectors 7500 8000 9000 5000 3500

Other employees 2500 3400 2000 3000 1500 Base 150

19

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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 organisationsrsquo resourcing budgets for 2011ndash12

(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 inshy

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

2011 Changes in recruitment practices are also

anticipated More organisations plan to make use

of new mediatechnology 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 organisationsrsquo resourcing budgets ()

Private Public Voluntary community All sector services and not-for-profit

2011 2010 2011 2010 2011 2010 2011 2010

Reduced 49 53 41 51 82 59 51 61

Stayed about the same 36 37 39 40 14 36 40 34

Increased 8 7 11 4 1 5 4 5

Dont know 7 3 8 5 3 5 Base 615 (2011) 475 (2010)

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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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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25

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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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27

28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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29

2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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31

32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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

RESO

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35

2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

cipd

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survey

2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

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12

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 5000 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 250ndash999

employees and just 15 of organisations with

fewer than 50 employees12 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

39

42

9Fewer than 50

17

1650ndash249

21

29 250ndash999

1000ndash4999 47

61 More than 5000

62

10 40 50 60 70 80

2011

0 3020 Percentage

2010

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 professionalsspecialists

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

collaboration between industry and academic

institutions and more vocational training in order

to meet organisationsrsquo skill requirements

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

The proportion reporting their recruitment

problems are due to potential candidatesrsquo

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

lsquohangoverrsquo 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 yearrsquos findings this is particularly an

issue for the public sector (22) which is also more

likely to report the image of their sectoroccupation

is a problem (22)

Table 7 Organisations experiencing difficulties recruiting for one or more category of vacancy by organisation size ( of those that have had vacancies to fill)

Voluntary Manufacturing community

and Private sector and All 2011 production services Public services not-for-profit

Difficulty filling one or 75 88 77 66 62more vacancies

No difficulties experienced 25 12 23 34 38

Base 561

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RESOURCING AND TALENT PLANNING

Table 8 Categories of vacancy that proved particularly difficult to fill ( of respondents)

Voluntary community

Manufacturing Private and and sector Public not-for-

All 2011 production services services profit All 2010

Other managers and professionalsspecialists

34 41 33 27 34 37

Technical 30 53 29 20 16 28

Senior managers directors

14 13 16 10 16 16

Services (customer personal protective 7 6 8 3 5 5 and sales)

Administrative secretarial

4 3 4 4 4 3

Manualcraft workers 4 11 3 1 0 2

Other 6 5 3 10 11 4

No difficulties experienced

23 12 22 30 38 25

No vacancies to fill 6 3 7 10 1 6 Base 597 (2011) 468 (2010)

Voluntary community

Manufacturing Private and All and sector Public not-for- All

2011 production services services profit 2010

Table 9 Reasons for recruitment difficulties ()

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Lack of necessary specialist or technical skills 72 82 69 80 59 67

Look for more pay than you could offer 46 47 48 34 52 39

Lack of experience 40 42 43 27 41 36

Reluctance to move in current economic climate 19 24 18 17 15 26

Lack of interpersonal skills 16 9 19 10 20 12

No applicants 15 9 16 22 20 15

Image of sector occupationorganisation 13 7 12 22 11 12

Relocation difficulties 9 19 6 10 7 8

Lack of formal qualifications 7 7 7 5 7 4

The impact of the immigration cap 3 2 4 3 4

Other 4 3 3 8 7 7

Base 427 (2011) 330 (2010)

new item introduced in 2011

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 250ndash999 employees and one-

sixth of those with more than 5000 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

methods14 The public sector is most likely to

have introduced or extended flexible working

homeworking15 whereas the private sector is

more likely to have made efforts to improve its

brand through working with charities or corporate

sponsorship16 Voluntary community and not-forshy

profit organisations are most likely to have used

placement students to improve their brand17

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 organisationsrsquo 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 websites18

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 journalstrade press

Secondments are also deemed to be more effective

in these sectors than in the private sector

Table 10 Work undertaken over last year to improve employer brand ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Employee surveys 39 39 38 43

Developing online careers site 30 33 23 29

Introducingextending flexible working homeworking 24 20 39 29

Placement students 23 21 19 35

Graduate careers fairs 15 17 11 8

Working with charities 14 16 8 6

Corporate sponsorship 11 13 2 8

Introducing sabbaticals 3 4 1 5

Other 7 6 6 10

No action taken to improve employer brand 27 28 29 22

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Base 601

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16

RESOURCING AND TALENT PLANNING

Table 11 Most effective methods for attracting applications by industry sector ()

Sector 2011 Number of UK employees 2011

All

2010

All

2011

Man

ufa

ctu

rin

gan

d p

rod

uct

ion

Priv

ate

sect

or

serv

ices

Pub

lic s

ervi

ces

Vo

lun

tary

co

mm

un

ity

and

no

t-fo

r-p

rofi

t

1ndash49

50ndash2

49

250ndash

999

100

0ndash4

999

Mo

re t

han

500

0

Own corporate website 63 59 44 57 77 66 42 55 57 77 79

Recruitment agencies 60 54 77 62 22 30 39 59 66 51 41

Local newspaper advertisements 36 32 38 23 41 51 28 35 35 29 29

Employee referral scheme 35 29 33 38 5 14 20 33 27 32 29

Commercial job boards 33 27 33 29 14 29 21 27 25 42 26

Specialist journalstrade press 31 27 24 23 30 43 26 23 32 32 24

Encourage speculative applicationsword of mouth 24 25 30 29 9 23 27 31 23 19 19

Jobcentre Plus 23 25 24 24 22 34 16 29 21 25 32

Professional networking (such as LinkedIn) 14 16 11 23 5 9 28 13 13 18 17

Search consultants 22 15 24 17 5 4 14 11 17 18 15

Links with schoolscollegesuniversities 18 13 16 13 9 17 12 13 11 18 15

Apprenticeships 12 11 19 9 13 9 10 10 11 12 17

National newspaper advertisements 16 11 4 6 23 29 10 9 15 10 15

Secondments 11 11 7 8 21 12 2 9 13 11 19

Links with other local organisations making redundancies 7 13 5 7 9 6 5 9 11 8

Alumni (previous employees) 5 5 6 7 2 1 7 2 6 11 3

Social networking sites (such as Facebook) 3 4 4 5 3 4 3 2 2 8 12

Local Employment Partnership (LEP) 6 3 1 4 2 5 1 2 3 4 9

Other 5 5 2 3 12 6 8 3 4 4 5

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Base 604 (2011) 464 (2010)

new item introduced in 2011

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

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 CVsapplication 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)

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-forshy

profit sector)

Table 12 Changes in attitudes to and relationships with recruitment partners over the past 12 months ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Not changed 36 34 40 39

Reduced use of recruitment partners 32 34 32 26

Formed a closer business partnership with them 19 23 8 12

Consider them an unnecessary expense 12 11 13 16

Consider them an unaffordable expense 11 10 11 22

Consider them integral to attracting top talent 9 11 2 4

Stopped using recruitment partners 6 5 8 5

Other 3 3 3 3 Base 604

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RESOURCING AND TALENT PLANNING

Table 13 Methods used to select applicants ()

2011 2010 2009 survey survey survey

Competency-based interviews 70 78 69

Interviews following contents of CVapplication form 63 64 68

Structured interviews (panel) 56 61 59

Tests for specific job-related skills 49 48 50

Telephone interviews 43 47 38

Literacy andor numeracy tests 38 43 39

Personalityaptitudepsychometric questionnaires 35 44 35

Assessment centres 35 42 35

Pre-application eliminationprogression question(s) 25 32 NA

General ability tests 23 27 44

Group exercises (for example role-playing) 21 30 26

Pre-interview references (academic or employment) 9 16 19

Video CVs 0 1 NA

Other 3 4 6

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Base 605 (2011) 473 (2010) 754 (2009)

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 1ndash49 employees use it

compared with 34 of organisations with 250ndash999

employees and 24 of organisations with more

than 5000 employees)20

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 strengths-

based 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

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

Recruitment costs 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

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

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 managerdirectors 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 managersdirectors than in the public or not-

for-profit sectors

Table 14 Criteria included in cost per hire calculations ()

Size ndash number of employees in UK

Advertising costs

Agencysearch costs

Employee referrals

Travel expenses

Relocation expenses

Fixed costs of resourcing team

Opportunity costs of hiring managers time

Other

Dont 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 (pound)

Median 2011 Median 2010 (no of (no of

Occupational group respondents) Minimum Maximum respondents)

Senior managersdirectors 7000 (219) 251 55000 8333 (234)

Other employees 2000 (246) 150 32000 2930 (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 (pound)

Voluntary

Median 2011 Manufacturing

and Private Public

community and not-for-

Occupational group production sector services profit

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Senior managersdirectors 7500 8000 9000 5000 3500

Other employees 2500 3400 2000 3000 1500 Base 150

19

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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 organisationsrsquo resourcing budgets for 2011ndash12

(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 inshy

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

2011 Changes in recruitment practices are also

anticipated More organisations plan to make use

of new mediatechnology 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 organisationsrsquo resourcing budgets ()

Private Public Voluntary community All sector services and not-for-profit

2011 2010 2011 2010 2011 2010 2011 2010

Reduced 49 53 41 51 82 59 51 61

Stayed about the same 36 37 39 40 14 36 40 34

Increased 8 7 11 4 1 5 4 5

Dont know 7 3 8 5 3 5 Base 615 (2011) 475 (2010)

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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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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23

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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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25

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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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27

28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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29

2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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31

32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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35

2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

cipd

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survey

2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

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 professionalsspecialists

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

collaboration between industry and academic

institutions and more vocational training in order

to meet organisationsrsquo skill requirements

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

The proportion reporting their recruitment

problems are due to potential candidatesrsquo

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

lsquohangoverrsquo 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 yearrsquos findings this is particularly an

issue for the public sector (22) which is also more

likely to report the image of their sectoroccupation

is a problem (22)

Table 7 Organisations experiencing difficulties recruiting for one or more category of vacancy by organisation size ( of those that have had vacancies to fill)

Voluntary Manufacturing community

and Private sector and All 2011 production services Public services not-for-profit

Difficulty filling one or 75 88 77 66 62more vacancies

No difficulties experienced 25 12 23 34 38

Base 561

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14

RESOURCING AND TALENT PLANNING

Table 8 Categories of vacancy that proved particularly difficult to fill ( of respondents)

Voluntary community

Manufacturing Private and and sector Public not-for-

All 2011 production services services profit All 2010

Other managers and professionalsspecialists

34 41 33 27 34 37

Technical 30 53 29 20 16 28

Senior managers directors

14 13 16 10 16 16

Services (customer personal protective 7 6 8 3 5 5 and sales)

Administrative secretarial

4 3 4 4 4 3

Manualcraft workers 4 11 3 1 0 2

Other 6 5 3 10 11 4

No difficulties experienced

23 12 22 30 38 25

No vacancies to fill 6 3 7 10 1 6 Base 597 (2011) 468 (2010)

Voluntary community

Manufacturing Private and All and sector Public not-for- All

2011 production services services profit 2010

Table 9 Reasons for recruitment difficulties ()

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Lack of necessary specialist or technical skills 72 82 69 80 59 67

Look for more pay than you could offer 46 47 48 34 52 39

Lack of experience 40 42 43 27 41 36

Reluctance to move in current economic climate 19 24 18 17 15 26

Lack of interpersonal skills 16 9 19 10 20 12

No applicants 15 9 16 22 20 15

Image of sector occupationorganisation 13 7 12 22 11 12

Relocation difficulties 9 19 6 10 7 8

Lack of formal qualifications 7 7 7 5 7 4

The impact of the immigration cap 3 2 4 3 4

Other 4 3 3 8 7 7

Base 427 (2011) 330 (2010)

new item introduced in 2011

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 250ndash999 employees and one-

sixth of those with more than 5000 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

methods14 The public sector is most likely to

have introduced or extended flexible working

homeworking15 whereas the private sector is

more likely to have made efforts to improve its

brand through working with charities or corporate

sponsorship16 Voluntary community and not-forshy

profit organisations are most likely to have used

placement students to improve their brand17

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 organisationsrsquo 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 websites18

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 journalstrade press

Secondments are also deemed to be more effective

in these sectors than in the private sector

Table 10 Work undertaken over last year to improve employer brand ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Employee surveys 39 39 38 43

Developing online careers site 30 33 23 29

Introducingextending flexible working homeworking 24 20 39 29

Placement students 23 21 19 35

Graduate careers fairs 15 17 11 8

Working with charities 14 16 8 6

Corporate sponsorship 11 13 2 8

Introducing sabbaticals 3 4 1 5

Other 7 6 6 10

No action taken to improve employer brand 27 28 29 22

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Base 601

15

16

RESOURCING AND TALENT PLANNING

Table 11 Most effective methods for attracting applications by industry sector ()

Sector 2011 Number of UK employees 2011

All

2010

All

2011

Man

ufa

ctu

rin

gan

d p

rod

uct

ion

Priv

ate

sect

or

serv

ices

Pub

lic s

ervi

ces

Vo

lun

tary

co

mm

un

ity

and

no

t-fo

r-p

rofi

t

1ndash49

50ndash2

49

250ndash

999

100

0ndash4

999

Mo

re t

han

500

0

Own corporate website 63 59 44 57 77 66 42 55 57 77 79

Recruitment agencies 60 54 77 62 22 30 39 59 66 51 41

Local newspaper advertisements 36 32 38 23 41 51 28 35 35 29 29

Employee referral scheme 35 29 33 38 5 14 20 33 27 32 29

Commercial job boards 33 27 33 29 14 29 21 27 25 42 26

Specialist journalstrade press 31 27 24 23 30 43 26 23 32 32 24

Encourage speculative applicationsword of mouth 24 25 30 29 9 23 27 31 23 19 19

Jobcentre Plus 23 25 24 24 22 34 16 29 21 25 32

Professional networking (such as LinkedIn) 14 16 11 23 5 9 28 13 13 18 17

Search consultants 22 15 24 17 5 4 14 11 17 18 15

Links with schoolscollegesuniversities 18 13 16 13 9 17 12 13 11 18 15

Apprenticeships 12 11 19 9 13 9 10 10 11 12 17

National newspaper advertisements 16 11 4 6 23 29 10 9 15 10 15

Secondments 11 11 7 8 21 12 2 9 13 11 19

Links with other local organisations making redundancies 7 13 5 7 9 6 5 9 11 8

Alumni (previous employees) 5 5 6 7 2 1 7 2 6 11 3

Social networking sites (such as Facebook) 3 4 4 5 3 4 3 2 2 8 12

Local Employment Partnership (LEP) 6 3 1 4 2 5 1 2 3 4 9

Other 5 5 2 3 12 6 8 3 4 4 5

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Base 604 (2011) 464 (2010)

new item introduced in 2011

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

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 CVsapplication 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)

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-forshy

profit sector)

Table 12 Changes in attitudes to and relationships with recruitment partners over the past 12 months ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Not changed 36 34 40 39

Reduced use of recruitment partners 32 34 32 26

Formed a closer business partnership with them 19 23 8 12

Consider them an unnecessary expense 12 11 13 16

Consider them an unaffordable expense 11 10 11 22

Consider them integral to attracting top talent 9 11 2 4

Stopped using recruitment partners 6 5 8 5

Other 3 3 3 3 Base 604

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RESOURCING AND TALENT PLANNING

Table 13 Methods used to select applicants ()

2011 2010 2009 survey survey survey

Competency-based interviews 70 78 69

Interviews following contents of CVapplication form 63 64 68

Structured interviews (panel) 56 61 59

Tests for specific job-related skills 49 48 50

Telephone interviews 43 47 38

Literacy andor numeracy tests 38 43 39

Personalityaptitudepsychometric questionnaires 35 44 35

Assessment centres 35 42 35

Pre-application eliminationprogression question(s) 25 32 NA

General ability tests 23 27 44

Group exercises (for example role-playing) 21 30 26

Pre-interview references (academic or employment) 9 16 19

Video CVs 0 1 NA

Other 3 4 6

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Base 605 (2011) 473 (2010) 754 (2009)

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 1ndash49 employees use it

compared with 34 of organisations with 250ndash999

employees and 24 of organisations with more

than 5000 employees)20

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 strengths-

based 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

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

Recruitment costs 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

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

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 managerdirectors 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 managersdirectors than in the public or not-

for-profit sectors

Table 14 Criteria included in cost per hire calculations ()

Size ndash number of employees in UK

Advertising costs

Agencysearch costs

Employee referrals

Travel expenses

Relocation expenses

Fixed costs of resourcing team

Opportunity costs of hiring managers time

Other

Dont 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 (pound)

Median 2011 Median 2010 (no of (no of

Occupational group respondents) Minimum Maximum respondents)

Senior managersdirectors 7000 (219) 251 55000 8333 (234)

Other employees 2000 (246) 150 32000 2930 (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 (pound)

Voluntary

Median 2011 Manufacturing

and Private Public

community and not-for-

Occupational group production sector services profit

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Senior managersdirectors 7500 8000 9000 5000 3500

Other employees 2500 3400 2000 3000 1500 Base 150

19

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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 organisationsrsquo resourcing budgets for 2011ndash12

(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 inshy

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

2011 Changes in recruitment practices are also

anticipated More organisations plan to make use

of new mediatechnology 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 organisationsrsquo resourcing budgets ()

Private Public Voluntary community All sector services and not-for-profit

2011 2010 2011 2010 2011 2010 2011 2010

Reduced 49 53 41 51 82 59 51 61

Stayed about the same 36 37 39 40 14 36 40 34

Increased 8 7 11 4 1 5 4 5

Dont know 7 3 8 5 3 5 Base 615 (2011) 475 (2010)

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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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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25

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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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29

2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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31

32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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35

2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

cipd

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survey

2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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37

38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

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ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

14

RESOURCING AND TALENT PLANNING

Table 8 Categories of vacancy that proved particularly difficult to fill ( of respondents)

Voluntary community

Manufacturing Private and and sector Public not-for-

All 2011 production services services profit All 2010

Other managers and professionalsspecialists

34 41 33 27 34 37

Technical 30 53 29 20 16 28

Senior managers directors

14 13 16 10 16 16

Services (customer personal protective 7 6 8 3 5 5 and sales)

Administrative secretarial

4 3 4 4 4 3

Manualcraft workers 4 11 3 1 0 2

Other 6 5 3 10 11 4

No difficulties experienced

23 12 22 30 38 25

No vacancies to fill 6 3 7 10 1 6 Base 597 (2011) 468 (2010)

Voluntary community

Manufacturing Private and All and sector Public not-for- All

2011 production services services profit 2010

Table 9 Reasons for recruitment difficulties ()

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Lack of necessary specialist or technical skills 72 82 69 80 59 67

Look for more pay than you could offer 46 47 48 34 52 39

Lack of experience 40 42 43 27 41 36

Reluctance to move in current economic climate 19 24 18 17 15 26

Lack of interpersonal skills 16 9 19 10 20 12

No applicants 15 9 16 22 20 15

Image of sector occupationorganisation 13 7 12 22 11 12

Relocation difficulties 9 19 6 10 7 8

Lack of formal qualifications 7 7 7 5 7 4

The impact of the immigration cap 3 2 4 3 4

Other 4 3 3 8 7 7

Base 427 (2011) 330 (2010)

new item introduced in 2011

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 250ndash999 employees and one-

sixth of those with more than 5000 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

methods14 The public sector is most likely to

have introduced or extended flexible working

homeworking15 whereas the private sector is

more likely to have made efforts to improve its

brand through working with charities or corporate

sponsorship16 Voluntary community and not-forshy

profit organisations are most likely to have used

placement students to improve their brand17

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 organisationsrsquo 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 websites18

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 journalstrade press

Secondments are also deemed to be more effective

in these sectors than in the private sector

Table 10 Work undertaken over last year to improve employer brand ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Employee surveys 39 39 38 43

Developing online careers site 30 33 23 29

Introducingextending flexible working homeworking 24 20 39 29

Placement students 23 21 19 35

Graduate careers fairs 15 17 11 8

Working with charities 14 16 8 6

Corporate sponsorship 11 13 2 8

Introducing sabbaticals 3 4 1 5

Other 7 6 6 10

No action taken to improve employer brand 27 28 29 22

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Base 601

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16

RESOURCING AND TALENT PLANNING

Table 11 Most effective methods for attracting applications by industry sector ()

Sector 2011 Number of UK employees 2011

All

2010

All

2011

Man

ufa

ctu

rin

gan

d p

rod

uct

ion

Priv

ate

sect

or

serv

ices

Pub

lic s

ervi

ces

Vo

lun

tary

co

mm

un

ity

and

no

t-fo

r-p

rofi

t

1ndash49

50ndash2

49

250ndash

999

100

0ndash4

999

Mo

re t

han

500

0

Own corporate website 63 59 44 57 77 66 42 55 57 77 79

Recruitment agencies 60 54 77 62 22 30 39 59 66 51 41

Local newspaper advertisements 36 32 38 23 41 51 28 35 35 29 29

Employee referral scheme 35 29 33 38 5 14 20 33 27 32 29

Commercial job boards 33 27 33 29 14 29 21 27 25 42 26

Specialist journalstrade press 31 27 24 23 30 43 26 23 32 32 24

Encourage speculative applicationsword of mouth 24 25 30 29 9 23 27 31 23 19 19

Jobcentre Plus 23 25 24 24 22 34 16 29 21 25 32

Professional networking (such as LinkedIn) 14 16 11 23 5 9 28 13 13 18 17

Search consultants 22 15 24 17 5 4 14 11 17 18 15

Links with schoolscollegesuniversities 18 13 16 13 9 17 12 13 11 18 15

Apprenticeships 12 11 19 9 13 9 10 10 11 12 17

National newspaper advertisements 16 11 4 6 23 29 10 9 15 10 15

Secondments 11 11 7 8 21 12 2 9 13 11 19

Links with other local organisations making redundancies 7 13 5 7 9 6 5 9 11 8

Alumni (previous employees) 5 5 6 7 2 1 7 2 6 11 3

Social networking sites (such as Facebook) 3 4 4 5 3 4 3 2 2 8 12

Local Employment Partnership (LEP) 6 3 1 4 2 5 1 2 3 4 9

Other 5 5 2 3 12 6 8 3 4 4 5

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Base 604 (2011) 464 (2010)

new item introduced in 2011

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

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 CVsapplication 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)

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-forshy

profit sector)

Table 12 Changes in attitudes to and relationships with recruitment partners over the past 12 months ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Not changed 36 34 40 39

Reduced use of recruitment partners 32 34 32 26

Formed a closer business partnership with them 19 23 8 12

Consider them an unnecessary expense 12 11 13 16

Consider them an unaffordable expense 11 10 11 22

Consider them integral to attracting top talent 9 11 2 4

Stopped using recruitment partners 6 5 8 5

Other 3 3 3 3 Base 604

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18

RESOURCING AND TALENT PLANNING

Table 13 Methods used to select applicants ()

2011 2010 2009 survey survey survey

Competency-based interviews 70 78 69

Interviews following contents of CVapplication form 63 64 68

Structured interviews (panel) 56 61 59

Tests for specific job-related skills 49 48 50

Telephone interviews 43 47 38

Literacy andor numeracy tests 38 43 39

Personalityaptitudepsychometric questionnaires 35 44 35

Assessment centres 35 42 35

Pre-application eliminationprogression question(s) 25 32 NA

General ability tests 23 27 44

Group exercises (for example role-playing) 21 30 26

Pre-interview references (academic or employment) 9 16 19

Video CVs 0 1 NA

Other 3 4 6

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Base 605 (2011) 473 (2010) 754 (2009)

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 1ndash49 employees use it

compared with 34 of organisations with 250ndash999

employees and 24 of organisations with more

than 5000 employees)20

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 strengths-

based 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

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

Recruitment costs 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

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

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 managerdirectors 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 managersdirectors than in the public or not-

for-profit sectors

Table 14 Criteria included in cost per hire calculations ()

Size ndash number of employees in UK

Advertising costs

Agencysearch costs

Employee referrals

Travel expenses

Relocation expenses

Fixed costs of resourcing team

Opportunity costs of hiring managers time

Other

Dont 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 (pound)

Median 2011 Median 2010 (no of (no of

Occupational group respondents) Minimum Maximum respondents)

Senior managersdirectors 7000 (219) 251 55000 8333 (234)

Other employees 2000 (246) 150 32000 2930 (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 (pound)

Voluntary

Median 2011 Manufacturing

and Private Public

community and not-for-

Occupational group production sector services profit

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Senior managersdirectors 7500 8000 9000 5000 3500

Other employees 2500 3400 2000 3000 1500 Base 150

19

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20

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 organisationsrsquo resourcing budgets for 2011ndash12

(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 inshy

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

2011 Changes in recruitment practices are also

anticipated More organisations plan to make use

of new mediatechnology 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 organisationsrsquo resourcing budgets ()

Private Public Voluntary community All sector services and not-for-profit

2011 2010 2011 2010 2011 2010 2011 2010

Reduced 49 53 41 51 82 59 51 61

Stayed about the same 36 37 39 40 14 36 40 34

Increased 8 7 11 4 1 5 4 5

Dont know 7 3 8 5 3 5 Base 615 (2011) 475 (2010)

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22

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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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25

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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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40

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

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 250ndash999 employees and one-

sixth of those with more than 5000 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

methods14 The public sector is most likely to

have introduced or extended flexible working

homeworking15 whereas the private sector is

more likely to have made efforts to improve its

brand through working with charities or corporate

sponsorship16 Voluntary community and not-forshy

profit organisations are most likely to have used

placement students to improve their brand17

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 organisationsrsquo 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 websites18

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 journalstrade press

Secondments are also deemed to be more effective

in these sectors than in the private sector

Table 10 Work undertaken over last year to improve employer brand ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Employee surveys 39 39 38 43

Developing online careers site 30 33 23 29

Introducingextending flexible working homeworking 24 20 39 29

Placement students 23 21 19 35

Graduate careers fairs 15 17 11 8

Working with charities 14 16 8 6

Corporate sponsorship 11 13 2 8

Introducing sabbaticals 3 4 1 5

Other 7 6 6 10

No action taken to improve employer brand 27 28 29 22

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Base 601

15

16

RESOURCING AND TALENT PLANNING

Table 11 Most effective methods for attracting applications by industry sector ()

Sector 2011 Number of UK employees 2011

All

2010

All

2011

Man

ufa

ctu

rin

gan

d p

rod

uct

ion

Priv

ate

sect

or

serv

ices

Pub

lic s

ervi

ces

Vo

lun

tary

co

mm

un

ity

and

no

t-fo

r-p

rofi

t

1ndash49

50ndash2

49

250ndash

999

100

0ndash4

999

Mo

re t

han

500

0

Own corporate website 63 59 44 57 77 66 42 55 57 77 79

Recruitment agencies 60 54 77 62 22 30 39 59 66 51 41

Local newspaper advertisements 36 32 38 23 41 51 28 35 35 29 29

Employee referral scheme 35 29 33 38 5 14 20 33 27 32 29

Commercial job boards 33 27 33 29 14 29 21 27 25 42 26

Specialist journalstrade press 31 27 24 23 30 43 26 23 32 32 24

Encourage speculative applicationsword of mouth 24 25 30 29 9 23 27 31 23 19 19

Jobcentre Plus 23 25 24 24 22 34 16 29 21 25 32

Professional networking (such as LinkedIn) 14 16 11 23 5 9 28 13 13 18 17

Search consultants 22 15 24 17 5 4 14 11 17 18 15

Links with schoolscollegesuniversities 18 13 16 13 9 17 12 13 11 18 15

Apprenticeships 12 11 19 9 13 9 10 10 11 12 17

National newspaper advertisements 16 11 4 6 23 29 10 9 15 10 15

Secondments 11 11 7 8 21 12 2 9 13 11 19

Links with other local organisations making redundancies 7 13 5 7 9 6 5 9 11 8

Alumni (previous employees) 5 5 6 7 2 1 7 2 6 11 3

Social networking sites (such as Facebook) 3 4 4 5 3 4 3 2 2 8 12

Local Employment Partnership (LEP) 6 3 1 4 2 5 1 2 3 4 9

Other 5 5 2 3 12 6 8 3 4 4 5

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Base 604 (2011) 464 (2010)

new item introduced in 2011

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

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 CVsapplication 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)

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-forshy

profit sector)

Table 12 Changes in attitudes to and relationships with recruitment partners over the past 12 months ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Not changed 36 34 40 39

Reduced use of recruitment partners 32 34 32 26

Formed a closer business partnership with them 19 23 8 12

Consider them an unnecessary expense 12 11 13 16

Consider them an unaffordable expense 11 10 11 22

Consider them integral to attracting top talent 9 11 2 4

Stopped using recruitment partners 6 5 8 5

Other 3 3 3 3 Base 604

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RESOURCING AND TALENT PLANNING

Table 13 Methods used to select applicants ()

2011 2010 2009 survey survey survey

Competency-based interviews 70 78 69

Interviews following contents of CVapplication form 63 64 68

Structured interviews (panel) 56 61 59

Tests for specific job-related skills 49 48 50

Telephone interviews 43 47 38

Literacy andor numeracy tests 38 43 39

Personalityaptitudepsychometric questionnaires 35 44 35

Assessment centres 35 42 35

Pre-application eliminationprogression question(s) 25 32 NA

General ability tests 23 27 44

Group exercises (for example role-playing) 21 30 26

Pre-interview references (academic or employment) 9 16 19

Video CVs 0 1 NA

Other 3 4 6

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Base 605 (2011) 473 (2010) 754 (2009)

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 1ndash49 employees use it

compared with 34 of organisations with 250ndash999

employees and 24 of organisations with more

than 5000 employees)20

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 strengths-

based 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

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

Recruitment costs 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

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

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 managerdirectors 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 managersdirectors than in the public or not-

for-profit sectors

Table 14 Criteria included in cost per hire calculations ()

Size ndash number of employees in UK

Advertising costs

Agencysearch costs

Employee referrals

Travel expenses

Relocation expenses

Fixed costs of resourcing team

Opportunity costs of hiring managers time

Other

Dont 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 (pound)

Median 2011 Median 2010 (no of (no of

Occupational group respondents) Minimum Maximum respondents)

Senior managersdirectors 7000 (219) 251 55000 8333 (234)

Other employees 2000 (246) 150 32000 2930 (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 (pound)

Voluntary

Median 2011 Manufacturing

and Private Public

community and not-for-

Occupational group production sector services profit

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Senior managersdirectors 7500 8000 9000 5000 3500

Other employees 2500 3400 2000 3000 1500 Base 150

19

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20

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 organisationsrsquo resourcing budgets for 2011ndash12

(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 inshy

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

2011 Changes in recruitment practices are also

anticipated More organisations plan to make use

of new mediatechnology 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 organisationsrsquo resourcing budgets ()

Private Public Voluntary community All sector services and not-for-profit

2011 2010 2011 2010 2011 2010 2011 2010

Reduced 49 53 41 51 82 59 51 61

Stayed about the same 36 37 39 40 14 36 40 34

Increased 8 7 11 4 1 5 4 5

Dont know 7 3 8 5 3 5 Base 615 (2011) 475 (2010)

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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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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40

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

16

RESOURCING AND TALENT PLANNING

Table 11 Most effective methods for attracting applications by industry sector ()

Sector 2011 Number of UK employees 2011

All

2010

All

2011

Man

ufa

ctu

rin

gan

d p

rod

uct

ion

Priv

ate

sect

or

serv

ices

Pub

lic s

ervi

ces

Vo

lun

tary

co

mm

un

ity

and

no

t-fo

r-p

rofi

t

1ndash49

50ndash2

49

250ndash

999

100

0ndash4

999

Mo

re t

han

500

0

Own corporate website 63 59 44 57 77 66 42 55 57 77 79

Recruitment agencies 60 54 77 62 22 30 39 59 66 51 41

Local newspaper advertisements 36 32 38 23 41 51 28 35 35 29 29

Employee referral scheme 35 29 33 38 5 14 20 33 27 32 29

Commercial job boards 33 27 33 29 14 29 21 27 25 42 26

Specialist journalstrade press 31 27 24 23 30 43 26 23 32 32 24

Encourage speculative applicationsword of mouth 24 25 30 29 9 23 27 31 23 19 19

Jobcentre Plus 23 25 24 24 22 34 16 29 21 25 32

Professional networking (such as LinkedIn) 14 16 11 23 5 9 28 13 13 18 17

Search consultants 22 15 24 17 5 4 14 11 17 18 15

Links with schoolscollegesuniversities 18 13 16 13 9 17 12 13 11 18 15

Apprenticeships 12 11 19 9 13 9 10 10 11 12 17

National newspaper advertisements 16 11 4 6 23 29 10 9 15 10 15

Secondments 11 11 7 8 21 12 2 9 13 11 19

Links with other local organisations making redundancies 7 13 5 7 9 6 5 9 11 8

Alumni (previous employees) 5 5 6 7 2 1 7 2 6 11 3

Social networking sites (such as Facebook) 3 4 4 5 3 4 3 2 2 8 12

Local Employment Partnership (LEP) 6 3 1 4 2 5 1 2 3 4 9

Other 5 5 2 3 12 6 8 3 4 4 5

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Base 604 (2011) 464 (2010)

new item introduced in 2011

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

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 CVsapplication 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)

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-forshy

profit sector)

Table 12 Changes in attitudes to and relationships with recruitment partners over the past 12 months ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Not changed 36 34 40 39

Reduced use of recruitment partners 32 34 32 26

Formed a closer business partnership with them 19 23 8 12

Consider them an unnecessary expense 12 11 13 16

Consider them an unaffordable expense 11 10 11 22

Consider them integral to attracting top talent 9 11 2 4

Stopped using recruitment partners 6 5 8 5

Other 3 3 3 3 Base 604

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18

RESOURCING AND TALENT PLANNING

Table 13 Methods used to select applicants ()

2011 2010 2009 survey survey survey

Competency-based interviews 70 78 69

Interviews following contents of CVapplication form 63 64 68

Structured interviews (panel) 56 61 59

Tests for specific job-related skills 49 48 50

Telephone interviews 43 47 38

Literacy andor numeracy tests 38 43 39

Personalityaptitudepsychometric questionnaires 35 44 35

Assessment centres 35 42 35

Pre-application eliminationprogression question(s) 25 32 NA

General ability tests 23 27 44

Group exercises (for example role-playing) 21 30 26

Pre-interview references (academic or employment) 9 16 19

Video CVs 0 1 NA

Other 3 4 6

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Base 605 (2011) 473 (2010) 754 (2009)

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 1ndash49 employees use it

compared with 34 of organisations with 250ndash999

employees and 24 of organisations with more

than 5000 employees)20

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 strengths-

based 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

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

Recruitment costs 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

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

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 managerdirectors 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 managersdirectors than in the public or not-

for-profit sectors

Table 14 Criteria included in cost per hire calculations ()

Size ndash number of employees in UK

Advertising costs

Agencysearch costs

Employee referrals

Travel expenses

Relocation expenses

Fixed costs of resourcing team

Opportunity costs of hiring managers time

Other

Dont 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 (pound)

Median 2011 Median 2010 (no of (no of

Occupational group respondents) Minimum Maximum respondents)

Senior managersdirectors 7000 (219) 251 55000 8333 (234)

Other employees 2000 (246) 150 32000 2930 (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 (pound)

Voluntary

Median 2011 Manufacturing

and Private Public

community and not-for-

Occupational group production sector services profit

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Senior managersdirectors 7500 8000 9000 5000 3500

Other employees 2500 3400 2000 3000 1500 Base 150

19

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20

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 organisationsrsquo resourcing budgets for 2011ndash12

(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 inshy

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

2011 Changes in recruitment practices are also

anticipated More organisations plan to make use

of new mediatechnology 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 organisationsrsquo resourcing budgets ()

Private Public Voluntary community All sector services and not-for-profit

2011 2010 2011 2010 2011 2010 2011 2010

Reduced 49 53 41 51 82 59 51 61

Stayed about the same 36 37 39 40 14 36 40 34

Increased 8 7 11 4 1 5 4 5

Dont know 7 3 8 5 3 5 Base 615 (2011) 475 (2010)

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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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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23

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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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25

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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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31

32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

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

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 CVsapplication 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)

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-forshy

profit sector)

Table 12 Changes in attitudes to and relationships with recruitment partners over the past 12 months ()

Voluntary community

All Private Public and 2011 sector services not-for-profit

Not changed 36 34 40 39

Reduced use of recruitment partners 32 34 32 26

Formed a closer business partnership with them 19 23 8 12

Consider them an unnecessary expense 12 11 13 16

Consider them an unaffordable expense 11 10 11 22

Consider them integral to attracting top talent 9 11 2 4

Stopped using recruitment partners 6 5 8 5

Other 3 3 3 3 Base 604

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18

RESOURCING AND TALENT PLANNING

Table 13 Methods used to select applicants ()

2011 2010 2009 survey survey survey

Competency-based interviews 70 78 69

Interviews following contents of CVapplication form 63 64 68

Structured interviews (panel) 56 61 59

Tests for specific job-related skills 49 48 50

Telephone interviews 43 47 38

Literacy andor numeracy tests 38 43 39

Personalityaptitudepsychometric questionnaires 35 44 35

Assessment centres 35 42 35

Pre-application eliminationprogression question(s) 25 32 NA

General ability tests 23 27 44

Group exercises (for example role-playing) 21 30 26

Pre-interview references (academic or employment) 9 16 19

Video CVs 0 1 NA

Other 3 4 6

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Base 605 (2011) 473 (2010) 754 (2009)

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 1ndash49 employees use it

compared with 34 of organisations with 250ndash999

employees and 24 of organisations with more

than 5000 employees)20

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 strengths-

based 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

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

Recruitment costs 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

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

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 managerdirectors 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 managersdirectors than in the public or not-

for-profit sectors

Table 14 Criteria included in cost per hire calculations ()

Size ndash number of employees in UK

Advertising costs

Agencysearch costs

Employee referrals

Travel expenses

Relocation expenses

Fixed costs of resourcing team

Opportunity costs of hiring managers time

Other

Dont 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 (pound)

Median 2011 Median 2010 (no of (no of

Occupational group respondents) Minimum Maximum respondents)

Senior managersdirectors 7000 (219) 251 55000 8333 (234)

Other employees 2000 (246) 150 32000 2930 (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 (pound)

Voluntary

Median 2011 Manufacturing

and Private Public

community and not-for-

Occupational group production sector services profit

RESO

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Senior managersdirectors 7500 8000 9000 5000 3500

Other employees 2500 3400 2000 3000 1500 Base 150

19

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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 organisationsrsquo resourcing budgets for 2011ndash12

(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 inshy

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

2011 Changes in recruitment practices are also

anticipated More organisations plan to make use

of new mediatechnology 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 organisationsrsquo resourcing budgets ()

Private Public Voluntary community All sector services and not-for-profit

2011 2010 2011 2010 2011 2010 2011 2010

Reduced 49 53 41 51 82 59 51 61

Stayed about the same 36 37 39 40 14 36 40 34

Increased 8 7 11 4 1 5 4 5

Dont know 7 3 8 5 3 5 Base 615 (2011) 475 (2010)

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22

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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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25

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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

cipd

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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

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

18

RESOURCING AND TALENT PLANNING

Table 13 Methods used to select applicants ()

2011 2010 2009 survey survey survey

Competency-based interviews 70 78 69

Interviews following contents of CVapplication form 63 64 68

Structured interviews (panel) 56 61 59

Tests for specific job-related skills 49 48 50

Telephone interviews 43 47 38

Literacy andor numeracy tests 38 43 39

Personalityaptitudepsychometric questionnaires 35 44 35

Assessment centres 35 42 35

Pre-application eliminationprogression question(s) 25 32 NA

General ability tests 23 27 44

Group exercises (for example role-playing) 21 30 26

Pre-interview references (academic or employment) 9 16 19

Video CVs 0 1 NA

Other 3 4 6

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Base 605 (2011) 473 (2010) 754 (2009)

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 1ndash49 employees use it

compared with 34 of organisations with 250ndash999

employees and 24 of organisations with more

than 5000 employees)20

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 strengths-

based 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

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

Recruitment costs 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

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

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 managerdirectors 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 managersdirectors than in the public or not-

for-profit sectors

Table 14 Criteria included in cost per hire calculations ()

Size ndash number of employees in UK

Advertising costs

Agencysearch costs

Employee referrals

Travel expenses

Relocation expenses

Fixed costs of resourcing team

Opportunity costs of hiring managers time

Other

Dont 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 (pound)

Median 2011 Median 2010 (no of (no of

Occupational group respondents) Minimum Maximum respondents)

Senior managersdirectors 7000 (219) 251 55000 8333 (234)

Other employees 2000 (246) 150 32000 2930 (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 (pound)

Voluntary

Median 2011 Manufacturing

and Private Public

community and not-for-

Occupational group production sector services profit

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Senior managersdirectors 7500 8000 9000 5000 3500

Other employees 2500 3400 2000 3000 1500 Base 150

19

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20

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 organisationsrsquo resourcing budgets for 2011ndash12

(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 inshy

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

2011 Changes in recruitment practices are also

anticipated More organisations plan to make use

of new mediatechnology 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 organisationsrsquo resourcing budgets ()

Private Public Voluntary community All sector services and not-for-profit

2011 2010 2011 2010 2011 2010 2011 2010

Reduced 49 53 41 51 82 59 51 61

Stayed about the same 36 37 39 40 14 36 40 34

Increased 8 7 11 4 1 5 4 5

Dont know 7 3 8 5 3 5 Base 615 (2011) 475 (2010)

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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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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31

32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

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 managerdirectors 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 managersdirectors than in the public or not-

for-profit sectors

Table 14 Criteria included in cost per hire calculations ()

Size ndash number of employees in UK

Advertising costs

Agencysearch costs

Employee referrals

Travel expenses

Relocation expenses

Fixed costs of resourcing team

Opportunity costs of hiring managers time

Other

Dont 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 (pound)

Median 2011 Median 2010 (no of (no of

Occupational group respondents) Minimum Maximum respondents)

Senior managersdirectors 7000 (219) 251 55000 8333 (234)

Other employees 2000 (246) 150 32000 2930 (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 (pound)

Voluntary

Median 2011 Manufacturing

and Private Public

community and not-for-

Occupational group production sector services profit

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Senior managersdirectors 7500 8000 9000 5000 3500

Other employees 2500 3400 2000 3000 1500 Base 150

19

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20

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 organisationsrsquo resourcing budgets for 2011ndash12

(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 inshy

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

2011 Changes in recruitment practices are also

anticipated More organisations plan to make use

of new mediatechnology 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 organisationsrsquo resourcing budgets ()

Private Public Voluntary community All sector services and not-for-profit

2011 2010 2011 2010 2011 2010 2011 2010

Reduced 49 53 41 51 82 59 51 61

Stayed about the same 36 37 39 40 14 36 40 34

Increased 8 7 11 4 1 5 4 5

Dont know 7 3 8 5 3 5 Base 615 (2011) 475 (2010)

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22

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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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23

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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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25

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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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27

28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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29

2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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31

32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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35

2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

cipd

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survey

2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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37

38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

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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 organisationsrsquo resourcing budgets for 2011ndash12

(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 inshy

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

2011 Changes in recruitment practices are also

anticipated More organisations plan to make use

of new mediatechnology 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 organisationsrsquo resourcing budgets ()

Private Public Voluntary community All sector services and not-for-profit

2011 2010 2011 2010 2011 2010 2011 2010

Reduced 49 53 41 51 82 59 51 61

Stayed about the same 36 37 39 40 14 36 40 34

Increased 8 7 11 4 1 5 4 5

Dont know 7 3 8 5 3 5 Base 615 (2011) 475 (2010)

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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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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40

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

2011 Changes in recruitment practices are also

anticipated More organisations plan to make use

of new mediatechnology 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 organisationsrsquo resourcing budgets ()

Private Public Voluntary community All sector services and not-for-profit

2011 2010 2011 2010 2011 2010 2011 2010

Reduced 49 53 41 51 82 59 51 61

Stayed about the same 36 37 39 40 14 36 40 34

Increased 8 7 11 4 1 5 4 5

Dont know 7 3 8 5 3 5 Base 615 (2011) 475 (2010)

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22

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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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23

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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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25

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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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40

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

cipd

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22

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 talentniche areas

Focusing more on retaining rather than recruiting talent

Reducing reliance on recruitment agencies

Use of new mediatechnology 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 interimcontract staff recruited

Reducing our use of external consultants for resourcing and development

Increased recruitment of apprenticesinterns

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

8Reducing graduate recruitment 8

6Suspending graduate recruitment 7

36

28

36

28

26

30

35 35

35 15

29 23

28 19

24 12

22 30

22 16

18 11

13 12 12

10

12 10

66

59 46

51

47

46

45

44

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010

Base 582

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23

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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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25

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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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27

28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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29

2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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31

32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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

RESO

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35

2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

cipd

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survey

2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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37

38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

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23

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

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-profits21 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

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

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

73 76

54

62 66 66

55 63

72

52 41

20

44 45

52

44 48

53

34 32

23

19 22

27

0 10 20 30 40 50 60 70 80 Percentage of respondents

2011 2010 2009

Base 607 (2011) 475 (2010) 746 (2009)

item added 20102011

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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25

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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

cipd

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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40

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

24

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 ()

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Voluntary All community and All

2011 Private sector Public sector not-for-profit 2010

Yes 18 17 32 13 23

No 38 43 16 32 41

NA (no talent management spend) 44 40 52 55 36

Base 617 (2011) 471 (2010)

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25

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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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31

32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

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25

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 lsquoa truly

pioneering example of collaboration between a number of local authoritiesrsquo and is already

delivering against a range of objectives

The initial aim was to make a significant saving on the pound5ndash6 million annual cost of external

media advertising reported in 2008ndash09 and to create a more efficient and effective recruitment

system A shared portal was commissioned to offer a front-end website (wwwyourcounciljobs

couk) with a lsquoback-officersquo 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 lsquotrue collaborationrsquo with lsquo100 commitmentrsquo from all the councils involved The benefits

are clear annual media costs are dramatically reduced to approximately pound250000 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 pound97400 it is now pound15200 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 pound250000 across the consortium

More than 61000 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

pound17 million reduction in recruitment expenditure over the past 12 months

(continued)

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

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26

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 lsquowe had to find a different way of

doing thingsrsquo 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 lsquoa true example of what you can do if you collaborate across

authoritiesrsquo 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

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

2011

3 DIVERSITy

This section examines organisationsrsquo 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 with just under two-thirds of not-for-profit

a formal diversity strategy showing little change organisations and just two-fifths of private sector

over the past four years (2011 52 2010 55 companies (Table 19)25 Diversity strategies are also

2009 60 2008 55) Consistent with previous more common in larger organisations (regardless

yearsrsquo findings most public sector organisations of sector)26

(90) have a formal diversity strategy compared

Table 19 Does your organisation have a formal diversity strategy ()

Yes No Dont know

All 52 41 7

Sector

Private sector 41 50 8

Public services 90 9 1

Voluntary community and not-for-profit 63 33 4

Number of UK employees

Fewer than 50 45 50 5

50ndash249 43 51 6

250ndash999 48 44 7

1000ndash4999 65 31 4

More than 5000 80 9 11 Base 613

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28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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survey

Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

28

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 andor 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

andor 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

Private Public and not-sector services for-profit

2011 2010 2009 2008 2011 2011 2011 survey survey survey survey (2010) (2010) (2010)

Monitoring recruitment andor staffing information to obtain data on gender 78 79 84 83 70 (71) 88 (96) 88 (76) ethnicity disability age any other categories

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Training interviewers to understand what diversity is about and the impact of stereotypes

57 68 68 60 53 (66) 64 (73) 57 (72)

Actively trying to attract talent of all ages 45 53 32 43

Operating policies that go beyond basic legislative requirements on age gender race disability sexual orientation religion and belief

39 49 52 48 34 (44) 47 (63) 47 (40)

Providing recruitment documents in other 39 41 37 31 24 (22) 64 (77) 47 (52)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

36 42 47 34 39 (44) 35 (45) 27 (16)

Advertising vacancies in different sources to 31 37 51 48 22 (30) 44 (53) 41 (32)attract under-represented groups

Using specific imageswords in your recruitment advertising to appeal to a wider audience 29 38 42 42 25 (30) 36 (52) 33 (40)

Making attempts to employ the long-term 19 19 13 29unemployed

Setting recruitment targets to correct a workforce imbalance 9 15 14 12 4 (8) 18 (31) 8 (16)

Base 312 (2011) 253 (2010) 419 (2009) new item added in 2011

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2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

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2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

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2011

4 mANAGING LABOUR TURNOVER

Figures from the Office for National Statistics show that UK unemployment rose by 27000 in the three months to the end of January 2011 to 253 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 decreased27

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

While median turnover rates have reduced

across all sectors Table 23 shows that 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 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 donrsquot 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

Retaining employees The steps organisations take to retain employees

in their workforce can have a significant impact

on organisational efficiency and success through

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

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Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

cipd

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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

RESO

UR

CIN

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ND

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G 2

011

35

2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

cipd

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ing

survey

2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

RESO

UR

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37

38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

cipd

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ing

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39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

cipd

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40

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

30

RESOURCING AND TALENT PLANNING

Table 21 Median rate of labour turnover ()

2011 2010 survey 2009 survey 2008 survey 2007 survey 2006 survey

125 135 157 173 181 183

Base 175 (2011)

Table 22 Median labour turnover rates by reason for leaving ()

2011 survey 2010 survey 2009 survey

Voluntary redundancies 0 0 0

Compulsory redundancies 0 10 05

Dismissedleft involuntarily (including death in service)

07 09 14

Fixed-short-term contracts 0 0 07

Retired 0 04 07

Left voluntarily 66 84 90

Base 154 (2011)

Table 23 Median labour turnover rates by industry sector ()

cipd

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k2011resou

rcing

and

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ing

survey

Sector All leavers Voluntary leavers

2011 survey

2010 survey

2009 survey

2011 survey

2010 survey

2009 survey

Manufacturing and production 93 (38) 124 (44) 153 (80) 37 (35) 27 (42) 77 (75)

Private sector services 138 (96) 146 (77) 168 (150) 87 (82) 74 (71) 104 (129)

Public services 85 (28) 86 (19) 126 (52) 34 (10) 58 (15) 76 (45)

Voluntary community not-for-profit 131 (11) 159 (15) 164 (38) 70 (24) 102 (18) 110 (35) Number of respondents shown in brackets

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 professionalsspecialists (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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

RESO

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32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

cipd

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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

RESO

UR

CIN

G A

ND

TALE

NT P

LAN

NIN

G 2

011

35

2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

cipd

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k2011resou

rcing

and

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lann

ing

survey

2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

RESO

UR

CIN

G A

ND

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NT P

LAN

NIN

G 2

011

37

38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

cipd

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ing

survey

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011

39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

cipd

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40

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

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 managersrsquo

people skills improve learning and development

opportunities and improve the induction process

Improving line managersrsquo 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 ()

Voluntary community

Private and All Manufacturing sector Public not-for- All

2011 and production services services profit 2010

Managers and professionals specialists 28 26 29 25 29 27

Technical 21 37 19 17 13 20

Services (customer personal protective and sales) 13 7 21 4 4 12

Administrative secretarial 9 5 8 15 13 7

Senior managersdirectors 7 5 8 10 6 9

Manualcraft workers 6 11 6 3 4 4 Base 601 (2011) 451 (2010)

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32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

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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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

cipd

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34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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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2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

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2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

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38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

RESO

UR

CIN

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ND

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011

39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

40

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

32

RESOURCING AND TALENT PLANNING

Table 25 Steps taken specifically to address staff retention ()

Used in Least Most Used in Used in Used in 2010 effective effective 2009 2008 2007

Improved line managers people skills 39 7 31 42 39 37

Increased learning and development opportunities 38 5 34 35 47 46

Improved induction process 38 12 22 31 45 45

Improved employee involvement 34 8 24 32 35 29

Improved selection techniques 30 7 25 31 42 46

Improved pay 27 11 23 22 42 53

Offered coachingmentoring buddy systems 24 8 14 20 24 22

Improved benefits 21 8 14 19 32 36

Better promotion to employees of the employer brand 18 10 5 15 21 16

Created clearer career paths 18 6 2 21 18 17

Revised the way staff are rewarded so their efforts are 18 4 13 14 19 19 better recognised

Made changes to improve workndash life balance 17 5 13 19 31 30

Improved physical working conditions 15 8 7 13 19 12

Redesigned jobs to make them more satisfying 11 4 8 13 18 14

Increased our use of countershyoffers 4 4 14

No specific initiatives undertaken 23 3 1 27 13 9 Base 559 (2011 survey) 431 (2010 survey) 695 (2009 survey) 710 (2008 survey)

new item added in 2011

cipd

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k2011resou

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33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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

RESO

UR

CIN

G A

ND

TALE

NT P

LAN

NIN

G 2

011

35

2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

RESO

UR

CIN

G A

ND

TALE

NT P

LAN

NIN

G 2

011

37

38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

RESO

UR

CIN

G A

ND

TALE

NT P

LAN

NIN

G 2

011

39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

40

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

RESO

UR

CIN

G A

ND

TALE

NT P

LAN

NIN

G 2

011

33

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 27000 in the three months

to the end of January 2011 to 253 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

CIPDrsquos 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 CIPDrsquos 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

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

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 2011ndash12 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

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

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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

RESO

UR

CIN

G A

ND

TALE

NT P

LAN

NIN

G 2

011

35

2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

RESO

UR

CIN

G A

ND

TALE

NT P

LAN

NIN

G 2

011

37

38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

RESO

UR

CIN

G A

ND

TALE

NT P

LAN

NIN

G 2

011

39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

40

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

34

RESOURCING AND TALENT PLANNING

by increasing apprenticeship schemes internships

and sponsoring students through university Such

schemes may be aided by the Governmentrsquos recently

announced pound60 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

organisationsrsquo 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 CIPDrsquos 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 lsquotalent

tunnel visionrsquo 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

leadershiptalent management capability gap with

too much focus on the operational needs of today

rather than the organisational imperatives

of tomorrow

Itrsquos 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 organisationrsquos current skills and future capabilities If you havenrsquot done so already conduct a thorough

inventory of your organisationrsquos 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 capability-building 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

RESO

UR

CIN

G A

ND

TALE

NT P

LAN

NIN

G 2

011

35

2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

RESO

UR

CIN

G A

ND

TALE

NT P

LAN

NIN

G 2

011

37

38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

RESO

UR

CIN

G A

ND

TALE

NT P

LAN

NIN

G 2

011

39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

40

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

RESO

UR

CIN

G A

ND

TALE

NT P

LAN

NIN

G 2

011

35

2011

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 CIPDrsquos Recruitment Retention and Turnover

survey) The survey examines organisationsrsquo

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 follow-

up 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)

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

RESO

UR

CIN

G A

ND

TALE

NT P

LAN

NIN

G 2

011

37

38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

RESO

UR

CIN

G A

ND

TALE

NT P

LAN

NIN

G 2

011

39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

40

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

36

RESOURCING AND TALENT PLANNING

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

Manufacturing and production 113 19

Agriculture and forestry 1 0

Chemicals oils and pharmaceuticals 9 1

Construction 8 1

Electricity gas and water 4 1

Engineering electronics and metals 38 6

Food drink and tobacco 18 3

General manufacturing 6 1

Mining and quarrying 4 1

Paper and printing 6 1

Textiles 2 0

Other manufacturingproduction 17 3

Private sector services 319 52

Professional services (accountancy advertising consultancy legal etc) 78 13

Finance insurance and real estate 33 5

Hotels catering and leisure 26 4

IT services 26 4

Call centres 3 0

Media (broadcasting and publishing etc) 7 1

Retail and wholesale 40 7

Transport distribution and storage 23 4

Communications 6 1

Other private services 77 13

Public services 100 16

Central government 14 2

Education 12 2

Health 23 4

Local government 22 4

Other public services 29 5

Non-profit organisations 78 13

Care services 9 1

Charity services 32 5

Housing association 17 3

Other voluntary 20 3 Base 610

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

RESO

UR

CIN

G A

ND

TALE

NT P

LAN

NIN

G 2

011

37

38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

RESO

UR

CIN

G A

ND

TALE

NT P

LAN

NIN

G 2

011

39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

40

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

2011 Most respondents work in small to medium-sized

organisations in terms of the number of UK-

based 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 regioncountry (see Table A3)

Table A2 Breakdown of sample by organisation size ndash permanent employees in the UK

Fewer than 10 5

10ndash49 12

50ndash249 33

250ndash999 25

1000ndash4999 12

More than 5000 13 Base 610

Table A3 Main region covered by the reply

East Anglia 5

East Midlands 3

West Midlands 5

North-east of England 3

North-west of England 7

South-west of England 6

Yorkshire and Humberside 5

South-east of England (excluding London)

12

London 12

Scotland 6

Wales 3

Northern Ireland 3

Ireland 0

Whole of UK 29 Base 602

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 lsquocrude wastagersquo

method to calculate the rate of turnover This

method is calculated as follows

Labour turnover =

Number of leavers in a set period

______________________________________ 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

Note on statistics and figures used Some respondents did not answer all questions so

where percentages are reported in tables or figures

the respondent lsquobasersquo for that question is given

lsquoAveragersquo 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 Spearmanrsquos Rho correlation (Rho) is used

to examine relationships between variables We

report on statistics at the generally accepted level

of significance plt005

RESO

UR

CIN

G A

ND

TALE

NT P

LAN

NIN

G 2

011

37

38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

RESO

UR

CIN

G A

ND

TALE

NT P

LAN

NIN

G 2

011

39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

40

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

38

RESOURCING AND TALENT PLANNING

fURThER SOURCES Of INfORmATION

We produce a range of free factsheets surveys

guides and research reports which are available on

the CIPD website at cipdcoukhrresources

Read our factsheets on Employer Brand

Employee Turnover and Retention

Induction

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

cipdcoukresearchoutlook-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

Workforce planning Our guide Workforce Planning Right people right

time right skills (2010) gives advice on developing

workforce planning processes

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

cipdcoukbookstore

Managing Diversity in Practice Supporting

business goals (2007)

Managing Diversity and the Business Case (2008)

Sign up to receive our e-newsletter at

cipdcoukcipdupdate

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

RESO

UR

CIN

G A

ND

TALE

NT P

LAN

NIN

G 2

011

39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

40

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

RESO

UR

CIN

G A

ND

TALE

NT P

LAN

NIN

G 2

011

39

2011

ACkNOwLEDGEmENTS

The CIPD is very grateful to those organisations and

individuals who gave their time to take part in this

research They include

bull Annette Sinclair Senior Researcher at Roffey

Park for analysing the findings and writing this

comprehensive report

bull Members of the Recruitment Forum Steering

Committee for their input into the survey

design and assistance in piloting the

questionnaire

bull Hays for their support and commitment at

every stage of the research

bull All those who shared examples of their

organisationrsquos 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

(researchcipdcouk)

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

40

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

RESOURCING AND TALENT PLANNING

fOOTNOTES 1 Chi Square = 573 df = 5 p lt 0001 n = 604 2 Rho = 073 p lt 0001 n = 577 3 Rho = 045 p lt 0001 n = 533 4 F = 250 df = 2 p lt 0001 n = 533 5 Chi Square = 180 df = 6 p lt 001 n = 535 6 Chi Square = 71 df = 2 p lt 005 n = 603 7 Chi Square = 230 df = 6 p lt 001 n = 600 8 Chi Square = 91 df = 3 p lt 005 n = 598 9 Chi Square = 129 df = 4 p lt 005 n = 610

10 Rho = 034 p lt 0001 n = 609 11 Chi square = 217 df = 3 p lt 0001 n = 609 12 Chi Square = 609 df = 8 p lt 0001 n = 607 13 Chi Square = 208 df = 3 p lt 0001 n = 560 14 Size of organisation and developing online

careers site Rho = 025 p lt 0001 n = 599 Size of

organisation and employee surveys Rho = 019

p lt 0001 n = 599 15 Chi Square = 167 df = 2 p lt 0001 n = 599

16 Working with charities Chi Square = 80 df = 2 p

lt 005 n = 599 corporate sponsorship Chi Square

= 116 df = 2 p lt 001 n = 599 17 Chi Square = 76 df = 2 p lt 005 n = 599 18 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 Chi square = 109 df = 2 p lt 001 n = 610 20 Chi Square = 279 df = 4 p lt 0001 n = 610 21 Chi Square = 259 df = 6 p lt 0001 n = 598 22 Chi Square = 515 df = 6 p lt 0001 n = 597 22 Chi Square = 177 df = 8 p lt 005 n = 600 22 Chi Square = 339 df = 4 p lt 0001 n = 610 22 Chi Square = 820 df = 4 p lt 0001 n = 610 22 Chi Square = 522 df = 8 p lt 0001 n = 610 22 Rho = 024 p lt 0001 n = 195 22 Chi Square = 166 df = 2 p lt 0001 n = 544

cipd

cou

k2011resou

rcing

and

talentp

lann

ing

survey

40

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

2011

OTHER TITLES IN THIS SERIES

ABSENCE MANAGEMENT The annual Absence Management survey has been running for eleven years providing useful benchmarking data on absence levels the cost and causes of absence and how organisations are managing absence The latest report is brought to you in partnership with Simplyhealth

EMPLOYEE ATTITUDES TO PAY The annual Employee Attitudes to Pay survey investigates employee attitudes and expectations towards pay and bonuses Now in its third year this survey is carried out by YouGov and focuses on employees in the UK

REWARD MANAGEMENT The annual Reward Management survey has been running for ten years and provides practical insights into current trends practices and issues affecting reward management in the UK It examines strategic reward base and variable pay bonuses incentives pensions reward measurement and total reward issues This report was brought to you in partnership with Benefex

LEARNING AND TALENT DEvELOPMENT The annual Learning and Talent Development survey is now in its thirteenth year and provides valuable commentary on current and future issues and trends It explores employer support for learning talent management employee skills managing and evaluating coaching and training spend

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Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797

Issu

ed J

une

2011

Ref

eren

ce 5

552

copy C

hart

ered

Inst

itute

of

Pers

onne

l and

Dev

elop

men

t 20

11

Chartered Institute of Personnel and Development

151 The Broadway London SW19 1JQ

Tel 020 8612 6200 Fax 020 8612 6201

Email cipdcipdcouk Website cipdcouk

Incorporated by Royal Charter Registered charity no1079797