Training budgets set to increase as recruitment difficulties persist

Creating a better work/life balance and offering flexible working conditions, such as part-time working, flexi-time, job-sharing and home/tele-working, are among the primary incentives being offered by companies faced with recruitment difficulties according to the latest Recruitment Confidence Index (RCI). But so too is training.

Employers are realising the need to value their existing staff with more companies re-training their employees in a bid to keep them or as an alternative to circumvent recurrent recruitment problems. Over 80% of organisations either grew or maintained their training and development budgets last year and even more expected to do so in the coming 12 months.

Offering private healthcare and raised pay levels were also cited as a means of overcoming the recruitment difficulties which are expected to be particularly prominent in the IT, sales, engineering and production sectors.

The findings are contained in a special report within the RCI, a quarterly index produced by Cranfield School of Management and the Daily Telegraph in association with People Management.

Predictions for the next six months outline a picture of still significant difficulties in recruiting when compared to the Winter 2001/02 statistics. A majority of respondents (77%) expect that the percentage of vacancies that are difficult to fill will remain the same over the next six months and 18% expect a further deterioration.

So why is recruiting new staff still so difficult in the current climate of economic uncertainty? The reasons vary according to the sector, however, 43% of employers say that candidates lack suitable experience and a further quarter say they lack the necessary technical skills.

Professor Shaun Tyson of Cranfield School of Management said: "There have been long running difficulties in finding high quality people for engineering management and senior production posts, reflected again in this quarter's figures. Improvements to career development, training and succession planning might help organisations in this regard.

The computing sector is recorded as having the greatest recruitment problems: more than half (58%) of all the companies surveyed are expecting recruitment difficulties at the managerial/professional level within their computer/IT departments between now and May. Much of this may be attributable to the high salaries these experts can command as computer consultants rather than being in-house service providers. The inability to match salary expectations is the most common issue, cited by 62%.

The engineering sector is close behind with 53% expecting to experience problems. More than six in 10 organisations state the most common cause for recruitment difficulties is an insufficient number of applicants and almost five in 10 organisations claim the difficulties are due to the applicants' lack of technical skills or suitable experience. However, the sector is found to be one of the least likely to invest in training and development.

Nick Hill, Recruitment Sales Manager at the Daily Telegraph, said: "We'll probably see another three to six months before recruitment difficulties ease up and to succeed in this sort of environment, employers have to turn themselves into 'employers of choice'."

In the analysis of the sales sector, 44 % of organisations expect difficulties in the next six months. However in this case the most common barriers to recruitment are stated as a lack of expertise and location. Problems remain at their worst in London and the SouthEast. It is also an area earmarked for strong employment growth over the half year.

For production, as many as 47% cite a lack of managerial skills as a barrier to successful recruiting in addition to lack of experience and technical skills, but, like engineering, the sector is also found to be one of the least likely to invest in training and development.

Professor Tyson added: "Employers are using or expect to use three main strategies to overcome recruitment difficulties. Flexible working arrangements including more part time, flexitime, job share and home-working options are offered. To solve the sourcing problems changes to pay and benefits including for 26% of organisations the offer of private healthcare, and (for 29% of organisations) the retraining of existing employees are strategies utilised. Given that only 23% saw pay levels as critical to recruitment difficulties, these solutions all reflect the view that improvements in HR practices and policies are the main way to attract and retain talent."

Some 430 organisations representing a cross-section of business took part in the latest survey. The ten areas analysed were: Computing/IT, Customer services, Engineering, Finance/accounting, Logistics/distribution, Marketing, Personnel, Production, Purchasing, Sales.