UK: Human Resources: War Or Revolution?

Originally published in Forward Thinking, August 2007

During the late 1990s, we heard and read a lot about the ‘war for talent’ in the UK. Years later the skills shortage continues and is fuelling substantial salary increases in some sectors. As a result, it has become increasingly difficult to recruit and retain key talent, especially if the employer can’t afford to enter a bidding war.

Employers must consider their total offering to employees in a new light. The contract between employers and employees is no longer just about a specific salary level for carrying out set duties. To successfully recruit and retain key employees, it is essential to address the whole package offered to them, from holidays and training to wider personal skills development, such as management of people, communication and negotiation. Another important part of the package is the culture of the organisation, for instance, the ability to work flexibly or take sabbaticals.

This holistic approach has evolved from the demands of employees and their view of benefits as a complete package of rewards. The shift has led to the concept of ‘total reward’, with the provision of annual statements that quantify the overall value of an individual employee’s package, including base salary, variable pay, share ownership and other benefits.

To succeed in this continuing battle to recruit and retain key staff, it is more important than ever for employers, no matter the size of the organisation, to ensure that their people strategy is fully aligned to and supportive of their business strategy. A senior member of the human resources (HR) team should be involved in key business discussions to understand staff requirements now and in the future.

Alongside the responsibilities outlined above, businesses still rely on HR to ensure full compliance with the everchanging, complex area of employment law. Employers look to HR departments to advise on the impact of legislative changes to the business and how these can be implemented and adhered to in the most practical and appropriate way.

Perhaps the war for talent was actually the beginning of a revolution in the attitude of businesses to HR – a realisation that it was a dynamic function that could look after an organisation and deliver much more than pay and rations.

In this issue of Forward Thinking, we look at some approaches to the changing HR battleground, with thoughts on a number of people management issues to try and keep you ahead of the game.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.