One hand tied behind its back

By Glen Jenkins, CIPD Reward Examiner. 

The recent CIPD’s Resourcing and Talent Planning annual survey report makes interesting reading for reward specialists. It is clear that during the recession the war for talent in both the private and public sectors has not gone away. Indeed, in some occupations, competition between employers has even increased because of low numbers in the talent pool. 

A problem faced by both sectors is that those with scarce talent are looking for more pay than the organisation can afford. Larger organisations in the private sector seem to be more able to respond to these demands unlike, for example, SMEs. For the public sector, retaining managers and professional or specialist employees is seen as a particular cause for concern.

The continued pressures on public sector labour markets has resulted in a marked change in retention strategies in this sector to more focus on employee development strategies rather than employee reward strategies.  On first reading, instrumental rewards in terms of pay and benefits continue to fall in importance in the retention battle, yet increased pay remains one of the most effective retention strategies in an organisation’s arsenal.

These findings raise serious issues of the ability of the public sector, in particular, to respond to the war for talent in the managerial, professional and specialist labour markets where competitive rates of pay are clearly on the potential employee’s agenda. The recent announcement on further pay restraint and lack of progression in the public sector is likely to further impact on these sector trends. Constrained by these political imperatives, job evaluation structures and reduced benefits, the sector may have considerable difficulty in meeting labour market expectations for these roles. There are indications from the survey that for these employees the private sector has been able to respond in terms of increased pay etc, whereas the public sector has had one hand tied behind its back when it comes to acting strategically to improve recruitment and retention.   If the public sector is unable to fully respond to the competitive pressures of the labour market, the war for talent may already be lost.

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