New Boss Warns Employers Over Skills

24 February 2014

Chairman, Peter Schofield

Employers must alter their recruitment mindsets and respond to the recovering job market properly if they are to take advantage of the improving economy and avoid unnecessary wage inflation during 2014, according to Interim Managing Director, Phill Machell.

Phill, recently appointed Interim Managing Director of Ford & Stanley, issued his warning having seen a significant increase in demand for new talent, particularly in the rail and manufacturing sectors, since the final quarter of 2013 and a full order book going into 2014.  

As employment in England hits 30 million, and unemployment falls to its lowest level since 2009, businesses have to be increasingly sharp to get ahead of their competitors. Figures released by the CIPD in October revealed that 60 per cent of employers believe Britain is facing skills shortage.

Mr Machell, whose company provides front-line recruitment and supporting talent consultancy services to employers, said that failing to respond to a recovering job market in the correct manner will lead to many organisations being unable to take advantage of the recovery or over-inflating their wage bill and damaging profitability.

The sentiment is echoed by Group chairman, Peter Schofield, who heads the firm’s talent consultancy services and who has seen similar trends over the past 25 years.

“We have supported employers through three recessions now and the pattern is always the same,” he said. “During a recession the pace of recruitment slows down and employers have more time and more choice when it comes to selecting talent.  In a recovering labour market those dynamics change virtually overnight and those companies operating in pre-recovery mode miss out when talent becomes available.  

“We have to be very conscious of the fact that the skills shortages that hampered company performance between the last two recessions haven’t gone away”.

With regards to wage inflation, Mr Schofield is equally candid when he talks about employers’ need to have a credible message to take to the talent market.

“A strong and well defined employee value proposition (EVP) is essential. On average, those companies with a weak or undefined employee value proposition have to pay 25% more in salary to attract talent, which is where the unnecessary wage inflation comes from,” he said. 

A strong EVP also relies heavily on independence in the development of the message, to ensure credibility in a cynical talent market.  

He added: “There is a natural consumer cynicism towards any company that writes its own product or service reviews and employers need to think of their employment opportunities in exactly the same way. 

“People with in-demand skills should be regarded as consumers of employment opportunities.  Like any other consumer, they have choice, and exercise that choice whenever they enter the job market. They will look favourably at employers if they know that the information they receive from them has been independently gathered.”

Ford & Stanley offer employers three ways in which they can adapt their recruitment approach to take advantage of the recovering economy:

  1. Create a credible employee value proposition (EVP) that accurately reflects the employee experience, rather than a wish-list.
  2. Use the EVP message to re-engage with existing employees to reduce attrition 
  3. Train hiring managers in how to avoid unnecessary wage inflation & capture available talent as it becomes available 

Mr Machell, who recently joined Ford & Stanley from global recruitment business Michael Page to oversee the opening of their new headquarters in Derby and a rapid expansion of the company, also believes that employers should also take more advantage of the talent market knowledge that specialist recruitment firms can provide, rather than seeing their services as purely transactional.

He said: “Good recruiters spend every single day in the front-line speaking to the kind of in-demand people that employers report they have difficulty in recruiting.  They know who is available and, importantly, hear exactly why people leave and join companies.

“That knowledge can be invaluable and make the difference between securing the people needed to win or deliver on orders, or losing out to a competitor; a good example of this being a local rail client that recently needed a project manager on the ground in South Africa within 2 weeks to secure a £5million order.  Clearly, the opportunity cost pails into insignificance in such cases.”

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