Recruitment survey bring welcome news to recent graduates, especially those who may be struggling to find their ideal role.

Recently, we surveyed over 100 CEOs and Managers across small and large businesses, to find out what issues they faced when recruiting new staff.

The results showed that 69% of businesses struggle to some extend when recruiting and there is a wide range of reasons why.

While recruiters face challenges in filling empty roles, graduates face challenges in securing them.

In the UK alone, Higher Education Statistics Agency (HESA) 2015 data showed that almost 16,730 were out of work six months after leaving university and over 60,000 students were in “non-professional” roles, meaning they were overqualified for the work they were doing.

The results of the recruitment survey, however, show surprising opportunities for job-hunting graduates that may just address some of the biggest traditional hurdles to workplace entry:

Applicants Stand-out in an SME

According to the recruitment survey findings, students who target their application efforts towards SMEs stand a higher chance of having their CV read and considered.

  • 27% of SMEs cited “lack of applicants” as a key reason why they couldn’t fill roles within their businesses, compared to just 16% of larger businesses.

That means a graduate CV could be sitting in a much-reduced competitive pile of applications at an SME. Securing such a role could also offer the opportunity to join a small team in a growing business and experience more areas of it than the traditional single specialist department in a big corporation.

This experience early on could help graduates find their personal passion and strengths more quickly.

Landing a Job Without Experience

The recruitment survey found that attracting job applicants with the rights skills is an issue for businesses big and small, with 44% of all businesses claiming it as their biggest challenge.

Obviously more well-known companies receive greater volumes of applications; however, they feel inundated with applicants who don’t meet their requirements.

  • 35% of big businesses stated that “lack of skills or experience” in applicants was a challenge in their recruitment.

It is no secret that the more real-world job experiences an applicant has, the more employable they become. A university degree – while often a requirement for many roles – doesn’t take the place of relevant work experience.

Often graduates lacking in experience after years of study will find themselves either struggling to secure relevant interviews or doing work for which they are over-qualified.

With the aforementioned issues SMEs have in terms of attracting applicants, there is obviously a better chance of them considering hiring a less experienced graduate and training them for the role.

In fact, many businesses proactively seek grads as there are many advantages in doing so. The trouble for the grads is the sheer number of them. There’s a supply and demand issue, especially when it comes to the more obviously places to apply.

In the recruitment survey, small businesses respondents confirmed that a lack of applicants and tighter budgets for salaries lowers the bar and makes them more open to developing their employees.

  • 25% of small businesses cited an investment in training and development as the method they use to attract talent to their companies.

Taking advantage of this training and development could actually help graduates get a bigger leg up their chosen career ladder, more quickly, than those who enter traditional big-name businesses.

  • None of the respondents from larger business cited training and development as a recruitment strategy. 
  • However, 33% said “being a big, known brand” was their greatest recruitment asset

Competitive Salaries

Another regular complaint amongst graduates – whether in work or job seeking – is that the salaries advertised for graduate roles are too low.  The labour market data proves that it still does pay to get a degree at university (on average young graduates are more likely to be employed and are paid an average of £6,000 a year more than those with no degree).

However, it is equally true that graduate salaries haven’t risen with inflation.

A young graduate in 2008 was typically earning around £24,000. In 2015 a young graduate was still typically earning £24,000.

The recruitment survey confirmed that some businesses both big and small (16%) did find salary expectations a challenge when they were recruiting.

But it would be untrue to assume low salaries of the SME sector only, as a significant proportion of SME respondents said they actually offered larger salaries in order to compete in the market and attract applicants.

  • 33% of SMEs who responded to the survey said they offer larger salaries in order to be competitive in their industry.

The Future is Bright for Graduates

Every year a new batch of graduates will flood the job market, applying for all the easiest to find roles at the most well-known companies.

And with so many employers citing skills and experience as a recruitment issue, businesses know they have to look beyond qualifications to hire great staff.

In this competitive job market, the most successful graduate job hunters will be those seeking out their industry SMEs who are more likely to read CVs, have softer expectations in terms of experience, with many focussing on benefits like training and development to entice applicants and some offering rewarding salaries too.

Sending targeted applications to SMEs and demonstrating a clear desire to learn, develop and contribute, could be the key to graduate job success in 2017.

Previously referred to as Industrial Relations, Employee Relations is a practise which focusses on both the individual and collective relationships in the workplace.

The practise focusses on managers, training and supporting them to nurture trust-based relationships with their teams. In doing so, the intention is to generate a positive work culture which improves the overall productivity and output of a business, as well as it benefits the employees personal well-being.

As Employee relations specialists, our values are expressed in ‘Positive Employee Relations’.

Positive Employee Relations

Positive employee relations are about: –

  • Communications (ongoing and focused);
  • Employment procedures (particularly grievance and disciplinary);
  • Negotiating style (based on mutual needs);
  • HR culture (based on marketplace success).

Employment procedures are there to deal with difficulties that arise in the employment relationship and at some stage all employees will have issues that will cause them concern. This can be due to the behaviour of work colleagues, the attitude of managers, the operation of a Company policy, thwarted ambitions and a whole host of other reasons.

Even the most perfect of organisations can leave staff experiencing difficulties feeling alone, isolated, de-motivated and frustrated.  However, recognising the value of positive employee relations, a good organisation will ensure that these feelings won’t persist and fester by addressing the staff member’s complaint quickly and fairly and at the lowest level possible within the organisation.

Resolve the Complaint Quickly

Good day-to-day management ensures that the majority of complaints are resolved quickly and to the satisfaction of all concerned. Managers should be attempting to anticipate their staff’s grievance by capturing the complaints or potential complaints so that they can do something about it before they become problems.  The best managers respond quickly recognising that all complaints are potential disputes.

It is not always possible to find quick and easy solutions to employee’s complaints and a complaint that is not or cannot be resolved will be expressed formally as a grievance.  When managers know that employees are not satisfied with the response given to their complaints they should actively encourage them to formalise their concerns by registering a grievance.

Positive Employee Relations is managed through effective HR procedures, a coherent HR strategy and the careful management of the bargaining/ engagement relationship with employees and/or trade unions.

The management of employment relationships is a strategic issue. The most appropriate employment relationship required by your business strategy should be one which engenders a commitment to organisational aims, allows the employee to identify with the organisation and be more productive in the service of the goals of the organisation.

At its most effective, positive employee relations can support the development of managers by providing clear processes for managing grievance, discipline etc as well as ensuring that managers are trained in their best practice operation.

It supports communications that create shared understanding and clarity of decision making. Strong relationships are based on fairness, trust and mutual respect. These values are supported by employee relations processes, structures and procedures.

The business of work is a collaborative activity involving mutual dependencies and interests, even when conflict arises.

So, what are the elements of positive employee relations?

  • Good Communications
  • Trust
  • Managing perceptions and beliefs
  • An ethical approach
  • Clear expectations
  • Conflict Resolution

It works best when the capabilities of line managers have been enhanced in the areas of: –

  • Communications
  • Company Rules and Expectations
  • Work assignment
  • Conflict resolution
  • Self-awareness and personal impact

With enhanced capabilities, you get more regular engagements with staff, a higher level of professionalism, managing through the laws and regulations of the company and providing regular performance feedback become part of the day to day engagements with staff.

Poor Employee Relations

Some of the potential consequences of a poor employee relations climate include:

  • Greater use of representatives or employment forums even on minor work-related matters
  • Significantly higher use of management time on mundane operational matters
  • Adversarial, combative, low trust relationships between management and staff with no resolution apparent
  • Poor teamwork and integration of work processes
  • Employee absenteeism
  • Employee turnover
  • Litigation

The aim of positive employee relations is to create a culture where staff and managers may be assertive in the context of a shared understanding and positive commitment to the organisation strategy and their rights and responsibilities.

The culture can be identified as one of openness to change, flexibility, hard working and productive.

Positive employee relations are about aligned leadership and a basis for building congruence with the employee relations of the organisation and the leadership and strategic direction.

Do you require further support?

FordeHRCloud provide Employee Resolution expertise and support to SME employers to manage effectively employee relations. We provide guidance to enable managers to seek solutions, ask questions, and set up systems to pro-actively solve problems before they turn into time-wasters and legal risks. Get in touch for more information today.

At its core, the employment relationship is a legal one and it is critical that it is properly defined. While legislation specifies certain requirements, each company will have requirements which need to be codified in a contract of employment whether it is protecting intellectual property, health and safety, management of commercial information at the end of an employment relationship, the terms of a trial/ probation period etc.

A basic contract of employment is the legal foundation of the relationship that forms between you as an employer and the employees you hire.

If an employer neglects to create one at all, or develops a badly worded contract, then employees may have grounds to make legal claims against their employer under various pieces of employment legislation. In fact, if an employment contract doesn’t comply with the law, employees can claim up to four weeks wages. That is because there are rules and obligations in place about how you structure the relationship between employer and employee.
But while it is crucial to get this stage right, a basic employee contract is nothing to fear.

At FordeCloud we have created this guide to creating a basic employment contract, including the main terms and conditions you must include within it.

Main Terms and Conditions of a Contract of Employment

Main Terms

Section 3 Terms of Employment (Information) Act 1994 states that all your employees are entitled to a written statement containing their terms and conditions of employment. You must give them this within two months of their employment starting with you.

As minimum terms, you must include the following in this statement:

  1. Your full name as the employer.
  2. The employee’s full name.
  3. Your address as the employer (which can be either the address of the local/regional office the employee is based at, or the registered central office of the business. The term registered office is that meant by the Companies Act 1963 if you want to check this).
  4. The place of work (where the employee will be based). If there isn’t a specific location, then create a statement that sets out the required places, or places the employee is permitted to work at.
  5. The employee’s job title or the nature of the work they will be doing.
  6. The date that their employment will start (known as the commencement date).
  7. If the employment contract is temporary then state the expected duration, including an end date when the contract will expire.
  8. The method used, or rate, for calculating the employee’s salary. You must also include the pay reference period for the purposes of the National Minimum Wage Act 2000.
  9. State that the employee can request a written statement of the average hourly rate of pay for any reference period from the employer. This is under Section 23 of the National Minimum Wage Act 2000.
  10. The intervals set out for when the salary / wages are paid (e.g. weekly, monthyl, etc.)
  11. Explain any terms and conditions that relate to their hours of work, including overtime.
  12. Then state the terms and conditions for paid leave that isn’t sick leave. This should include holidays also.
  13. Provide any terms and conditions relating to incapacity for work. This will include sickness, injury and any paid sick leave.
  14. The particulars of any pension scheme you have in place for your employees.
  15. State the period of notice an employee is required to give you if they wish to end their contract of employment. Also state the period of notice they are entitled to receive should you wish to terminate the contract.
  16. If there is any collective agreement which would affect the terms and conditions of the employee’s employment then reference those.
  17. The statement must be signed and dated for, or on behalf of, the employer. The employee must receive it within two months of the commencement date on the contract (their employment start date).

Main Conditions

As a minimum, we would recommend that you should include the following in all your basic employment agreements:

  1. A probation period and a policy to allow for extension to the contract.
  2. Disciplinary Procedure.
  3. Grievance Procedure.
  4. Sexual Harassment Policy
  5. Conditions for the use of the internet and mobile phones.
  6. Social Media Policy.
  7. Bullying and Harassment Policy.
  8. A retirement age (although you must be able to justify setting the age).
  9. Provisions for deducting pay to include issues such as damage caused to property owned by the employer.
  10. Flexible working policies around flexibility in duties, job location or start and finish times.
  11. A policy around layoffs and short time that includes non-payment of salaries during lay off and short time periods, except wages paid for time the employee actually works.
  12. A policy to review performance and review pay.
  13. A post-termination non-compete clause.
  14. A clause stating non-solicitation of your clients/customers after the employee’s contract ends.
  15. A confidentiality clause that covers both during the term of employment and post-termination of the contract.
  16. Data Protection.
  17. The right to alter or amend the contract.
  18. Provision for Garden Leave, particularly during the employee’s notice period, allowing you to require that they don’t attend work during that time.
  19. A clause that confirms the Employee Handbook forms part of the contract of employment or employee agreement and will be amended from time to time.
  20. Include a clause excluding the Unfair Dismissal Acts for any Fixed Term employees.

We would always advise that you have an Employee Handbook in place when hiring staff and providing a contract of employment to an employee.

This means that the contract covers the basic terms of employment and the handbook can cover matters such as grievance and disciplinary policies, sick leave, holiday leave and other special leave, and others.

To see our dedicated guide to creating an Employee Handbook see here.

You will see that many of the terms and conditions to include in a staff handbook are pretty standard, however there can be the need to tailor the procedures individually to each employer (for example, what suits a large corporate may not suit a small business, and vice versa).

Designing both your handbook and your contracts of employment require a combination of HR, Legal and Industrial Relations expertise and information. Our guide here is just that – a guide – so before acting or refraining from anything described above, we recommend you obtain specialist advice.

Still not sure where to start?

There is support and guidance available for even the smallest of start-ups and businesses with services like FordeCloud. We have devised industry standard HR Documents for SMEs and update them regularly to ensure your business is always in good hands. We also provide software for time and attendance management and support you through employee resolution issues, as well as more general on demand HR support.

 

When it comes to the list of challenges faced by businesses big or small, old or new; recruiting new staff is always up there at the top of that list.

In order to best advise our customers, we wanted to know if the challenges in recruiting are the same as they always have been, and if they differ for large enterprises compared to SMEs.

We conducted a survey simply asking 100 CEOs and Managers “Do you find it difficult to recruit staff?” and then asked them to identify why in order to gain insight into modern recruitment challenges.

Overall, 69% of respondents said they found it difficult to recruit staff, but why…

What are the biggest challenges when recruiting?

The most prominent challenge that businesses face when recruiting is that applicants were not skilled or experienced enough to fill the position (44%). The next three reasons included lack of applicants (23%), challenging salary expectations (16%) and competition over quality applicants (13%).

What helps most when recruiting?

Meanwhile, those who didn’t struggle to recruit (31% of the survey respondents), stated that their recruitment successes came from offering large salaries (27%), followed by recruiting for a big or well-known brand. Company benefits and development opportunities both scored highly (17% respectively). 15% of respondents also cited “office location” as an advantage when recruiting.

So, the secret to hiring success?

The broad spread of responses given would indicate that there is in fact, no secret behind recruitment successes. Clearly, different strategies work for different companies. That means that the best strategy for recruitment is to identify what will work best for your particular business situation. 

Does business size matter?

Contrary to what you might expect, larger businesses actually find it equally difficult to hire new staff as SMEs.

In fact, a marginally higher portion of those in a larger enterprise said that they faced difficulties in hiring new staff – 73% compared to 66% of SMEs. However, the reasons behind these challenges differ between large and small enterprises and these differences offer key insights.

Recruitment challenges for large businesses

There’s clearly no shortage of CVs being submitted for the roles with only 16% coining “Lack of applicants”.  The main reasons why larger businesses felt they struggled to recruit included candidates lacking the required skills/experience (35%) and competition over candidates (28%). Therefore, where the applicants didn’t lack in skill, there was increased competition to acquire them.

When you consider that there’s no shortage of applications, but a lack of skilled applicants, it’s fair to surmise that larger businesses feel inundated with lower quality applicants who don’t meet basic role requirements.

Recruitment challenges for small businesses

Looking at the top reasons why SMEs felt they struggled to recruit tells a similar story but with some key differences. “Lack of skills and experience” is even more an issue than it is for larger businesses (50%). However, other prominent challenges were in the lack of applicants (27%) and keeping up with salary expectations (19%).

Learning from successfully recruiting companies

Whist the majority feel they struggle with recruitment, not all do. Building a great team is difficult, takes time and resources. To help guide a recruitment strategy and see that efforts yield the desired results, we also explored what worked well for both small and large businesses. 

Recruitment strategies that work for large businesses

Large businesses who feel they were enjoying relative success when it came to recruitment have highlighted some stand-out contributing factors. These include, being a big/known brand (33%), offering company benefits (27%) followed by good office locations (20%).

Recruitment strategies that work for small businesses

SMEs who reported successful recruitment strategies cited their winning factors as offering large salaries (33%) and placing an emphasis on training and development (25%).

 

 

Key takeaways for businesses

Comparing these tables demonstrates that larger businesses are far more able to leverage their brand equity to maintain a skilled workforce. They feel they can rely on the strength of their brand combined with wider company benefits for staff.

Unfortunately, many SMEs are not in such a privileged position, and so this provides little comfort. Those in the SME space may feel they are forced to compete with salaries to lure new staff to their fledgling business brands. This is obviously not ideal and places additional financial pressures.

However, many SMEs are choosing to invest more in training and development for their teams – things that ultimately benefit their employees. Offering benefits such as training helps to make smaller businesses hugely attractive as employers when pitted against larger rivals in the recruitment marketplace.

Too many applications? Improve recruitment processes

There is a clear mismatch between the job description listed and the experience level of applications received.

This results in a more time-consuming recruitment process that includes additional shortlisting. Businesses need a better process for quickly vetting candidates and shortlisting applications if almost half of those received will end up unsuitable for the role.

To combat receiving too many applications, businesses should consider an improved online application process with the ability to create screening options. Posing qualifying questions, requesting samples of work, or requesting a cover letter which touches on relevant experience areas, are all ways to narrow down the applicant pool.

These will enable you to quickly rule out those not suited to the role, without having to review all the CVs sent. Meanwhile, that extra step will be enough to put off those who blanket-apply for every job going.

Not skilled enough? Manage expectations

The survey clearly reveals a skills gap in the market, or at least the perception that there is one. There are a large number of businesses who feel that applicants aren’t fitting their exact requirements.

Those businesses struggling to find those with the right skills or experience may either want to review their criteria and expectations – the archetypal candidate rarely exists – or look into services like SkilledPeople.com who specialise in candidate with 20+ years experience.

Either way, businesses must be prepared to look beyond a black and white list of qualifications when it comes to hiring new staff. It’s rare to find the perfect candidate who ticks all the criteria boxes and also comes with all the knowledge they need to do your new job.

Remember that, those who do meet your criteria will be as highly sought after by your industry competitors as they are by you. Such candidates will be able to command larger salaries, forcing your staffing costs to rise.

Going above and beyond salaries

Most companies offer training of sorts but this isn’t always integrated into the recruitment process – it’s maybe an afterthought or possibly even just taken for granted. However, prospective new hires take great interest in the wider package.

Those promoting more than just salaries when recruiting will reap the rewards so don’t overlook the value placed on these by potential new employees. Include these in your employment pitch, especially if you will struggle to be as combative as your competitors when it comes to salaries.

Furthermore, your business can only benefit from a heavily skilled workplace.

Some employers may be tentative about investing in training as it’s can be expensive, time consuming and, should employee leave, that expensive training leaves with them. However, consider this advice given by Richard Branson:

“Train people well enough so they can leave,

treat them well enough so they don’t want to.”

Hire for attitude, train for skill

Instead of focusing on skills when interviewing, look to invest in training and nurture a culture of professional development. That way, you can affordably and literally “out-smart” your competitors.

Remember this golden rule – Hire for attitude, train for skill. 

Focus on graduate job hunters

It’s well documented that many companies like hiring graduates (who by default will not be overly skilled or experienced). Some of the key benefits to doing so include they can be moulded, and are keen to learn.

The market conditions described by the survey results mean that a greater number of SMEs are investing in training in order to stay competitive. It’s a win-win that offers SME’s the opportunity to hire experience hungry staff, and offers graduates the opportunity to get ahead in a chosen field.

The results of this survey should be welcomed by those struggling to get a foot in the door, particularly for those graduates who may want to pursue a career in a field that differs from what they originally studied (graduates don’t always follow in the career path of their respective field of study).

Possible need to relocate

Businesses on the outskirts may be losing out to inner city businesses with better transport links. If you’re struggling to recruit primarily because of your location, then this could provide a strong enough business case to relocate.  Expansion and recruitment should be an early consideration for any new business. You need to ask yourself whether you have access to the local talent pool which you will need in order to grow.

Increase salary offers (as a last resort)

Whilst a business shouldn’t rely solely on offering large salaries to recruit, ultimately, if you want the best candidate then you must be prepared to pay for them in a competitive marketplace.

For businesses who struggle to get good candidates over the line, if there’s limited alternative options available, nor scope to offer training or wider benefits, there may be a need to be more competitive with salaries.