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Winning the war for talent: The importance of employee retention and development

Talent
(Image credit: Image source: Shutterstock/Kirill Wright)

Recruitment during the pandemic has proven challenging across many industries. This is particularly true in the technology sector. The practical difficulties of recruiting during a lockdown are clear, in particular trying to understand a candidates’ cultural fit with what are often close-knit teams, whilst having largely virtual interactions. These are exacerbated by the fact that hiring across high-demand skill sets such as software development, digital and data science, has been highly competitive, with a shortage of suitable talent on the market. Recent data shows that less than a quarter of UK tech leaders find it easy to find suitably experienced candidates, with nearly 90 percent of firms wanting to see more university talent emerge.

Concerns about a UK skills shortage are nothing new, and are not going to be fixed quickly. Demand for these skills will continue to outweigh supply, and therefore technology businesses must think creatively about developing and retaining their existing talent, as well as how and where they recruit.

Assess the skills gap 

With nine in 10 firms admitting to having a digital skills shortage, it’s clear the current technology market is suffering from a widespread scarcity of talent. 

A good place for technology businesses to start is to conduct an honest self-appraisal about what skills they currently have and what skills will be needed to meet their strategic objectives in the medium term. Rather than having a reactionary response to skills gaps as and when they emerge, a roadmap of the skills needed should be developed which aligns to the product roadmap and organization’s strategy. Having a clear picture of how the organizational chart will need to develop allows considered recruitment and investment decisions as well as careful succession planning.

Create a compelling culture to attract and retain talent  

Working with innovative and exciting products, or solving complex client problems, is one of the benefits of working in technology, but it isn’t necessarily a differentiator. In the fight for talent, openness in communication is increasingly important for today’s employees and applicants. Business leaders who can articulate their organization’s mission and outline how every employee can contribute towards that, are more likely to build trust and excitement among staff and candidates. In a competitive market for talent, businesses with a clear mission, often with a social purpose – i.e. ‘tech for good’ - can fare better than those without. Good examples of this in ECI’s portfolio include Mobysoft, which uses technology to help social landlords reduce evictions, arrears and the number of tenants in debt; and Travel Chapter, which helps property owners to reach customers and promotes love of the British Countryside through partnering with various wildlife charities.  

Diversity and inclusion policies are also becoming a top criteria for candidates when they consider a move. Telling applicants that your business is responsible, inclusive and a great place to work is one step, but highlighting what action you are proactively taking and discussing your commitments for the future, will be what sets easy, but proving it through diversity of your workforce or giving back to your community is what can set you apart.

Conducting performance reviews around values and behaviors can be a way to ensure desired characteristics are actually present in your business’s culture. And cultural fit should be the key consideration when recruiting new talent into the organization – a hire may be talented but if they clash culturally it can be devastating to morale, output and retention. 

Consider new routes for talent  

Hiring highly skilled individuals is not the only route businesses can take when looking for new talent. In the UK, government apprenticeship schemes can provide support for businesses looking to recruit ambitious talent, early in their career, who can then be trained and promoted through the organization. These schemes can give businesses a strong pipeline of local, loyal talent. For example, ECI portfolio company CIPHR has been offering apprenticeship and training programs since 2012. Building on the success of this initiative, CIPHR has committed to having at least 5 percent of its employees enrolled in an eligible apprenticeship.  

Companies such as previous ECI investee, mthree, support organizations in finding the right skillsets, through hiring and training graduates in industry-aligned skills ahead of placing them in the company. As well as developing skills amongst young, new talent, businesses could also think about how they can support those looking for career changes later in life. These individuals might have the right leadership skills but not the right sector-specific knowledge, which your company can provide in intensive training courses. Rather than having to insource this capability, there are third parties who source and train this talent, often placing them in a consultancy capacity with the option of hiring them permanently in the future. 

Of course, the pandemic has accelerated the transition to hybrid and flexible working. Across the technology businesses in ECI’s portfolio, we are finding that the talent pool is no longer limited by proximity to the head office. Embracing hybrid and flexible working can broaden the talent available.

Employee development 

The most successful tech businesses will invest in developing talent, both to complement their recruitment initiatives and reduce employee churn. 

Many large businesses have set up in-house developer training programs – examples include Sky, Marks and Spencer, Spotify, Deliveroo and Etsy. Besides ensuring that staff improve their technical skills, they can also be taught soft skills pertinent to the business, and best practice. It also means employees can learn on the job, working on real-world projects to help them translate theory into reality. Nurturing talent in this way allows people to grow and develop together and can also improve the quality of communication between employees – a vital attribute when attracting staff.

Continued professional and personal development can be straightforward to achieve and often makes employees feel valued. Content+Cloud, for instance, sponsors people to secure Microsoft accreditation, while another portfolio company, CSL, which provides IoT connectivity solutions to the fire, security and telehealth sectors, sponsors some of its workers to take MBAs.

Leadership training 

Development shouldn’t stop once individuals reach the board room – indeed setting the tone of constant improvement from the top can instill a culture that celebrates progression. Staff are more likely to want to improve themselves, not just for their own benefit, but for the prosperity of their business, and succession becomes an opportunity rather than an existential threat. 

Stephen Roberts, Partner
Richard Chapman, Partner,
ECI Partners