Bringing new people into an organisation can bring many advantages, including fresh pairs of eyes and their experiences from working elsewhere. As organisational activities continue to evolve in important areas such as Artificial Intelligence (AI), it is likely that the skills profile required of new employees may be quite different from that of some of the existing workforce. There may also be an element of succession planning, particularly where the current age profiles may foresee gaps in the not-too-distant future.

However, there are also potential disadvantages. Even with a robust recruitment and selection process, there is always a risk that new staff may not deliver what they promised. Onboarding is a critical activity to ensure that new staff hit the ground earlier and start making a speedy contribution to performance and output. The current job market is particularly tough when trying to recruit people with the latest skills and knowledge, driving up the value of rewards packages that organisations may offer. This has also led to some employees playing off the employer who has offered the new role to their existing employer, seeking a retention offer.

Whilst an inflow of new staff can be useful, it is important to recognise the cost involved in recruiting new staff in terms of time and opportunity cost, followed by a period of familiarising themselves with the way things operate before they are at 100% capacity. Considering this, it is increasingly popular for organisations to have a people management strategy focused on the development and retention of existing staff.

Ideally, we want to retain as many employees as possible, but we need to recognise that this cannot always be related to their salary and rewards. In the current economic climate, many organisations have a recruitment or internal promotion freeze.

In a freezing situation, what can we do?

• Consider job rotations.
• Identify development opportunities that can be delivered in-house.
• Remind line managers about the importance of supporting their team.
• Provide internal recognition for outstanding performance – for example, a lunch hosted by the CEO.
• Offer flexibility in working hours that are cost-neutral to the organisation but highly welcomed by staff.

There are different approaches organisations can take to retain existing high-performing staff. For example, offering a financial incentive to stay, reviewing the balance of the rewards package, or investing in the employee through opportunities to improve skills. It is never possible or desirable for 100% of the workforce to remain, as there is a potential that ‘group think’ sets in without any external perspectives to drive forward innovation.

Offering learning opportunities can be a very effective way of attracting and retaining good employees. There are different ways of doing this, constrained by the amount of money available. An inexpensive approach is to invite employees to a course that aids their current role but also helps them develop professional and personal skills.

Depending on the type of organisation and industry, it may be appropriate to design and deliver promotion-focused workshops that staff can attend voluntarily. This allows them to reflect on their current skills and knowledge and be supported to develop a plan for their future careers. Having the opportunity for career development can be motivating for employees, particularly if they receive active support to develop what is needed for their next role. Mapping out potential career paths for individual roles can also be helpful, as not all employees can visualise this on their own.

Organisations may also explore external funding or low-cost delivery of formal academic programs spearheaded by national governments. In the UK, for instance, the degree apprenticeship initiative incurs no direct cost to employers apart from releasing employees for one day per week to attend classes. This approach has been successful in retaining long-term staff who did not have the opportunity to study for a degree before they began working.

For employees who are already degree holders, a different proposition may be needed, such as sponsorship for a higher-level degree (e.g., a master’s) or a professional qualification. The costs for these are significantly higher, so organisations must carefully weigh the cost-benefit and consider the difficulty of recruiting new employees in that area. In the UK, it is common for organisations to include a contractual term requiring employees to repay fees if they leave the organisation within a specified time. This protects against spending money on someone who might take their new knowledge to a competitor.

As always, understanding what employees value is critical in shaping strategies for recruitment, selection, and retention. Surveys, focus groups, or one-on-one conversations with staff can provide valuable insights into what drives engagement and loyalty, allowing organisations to design tailored and effective people management strategies.