Despite talk of a looming recession and high interest rates, the skills shortage persists, and could even be worsening. So, how can you overcome this problem to retain a competitive advantage in a tight market, and do your staff / team development policies provide support this?
The latest US figures, for example, show unemployment at an all-time low of 3.5% (5.7 million people) at the time of writing, while job openings persist at well over 10 million. In the UK the unemployment rate is at 3.8% (1.28 million), offset by a job vacancy rate slightly higher at 1.3 million. And they’re not alone – most countries are experiencing a shortage of skills, regardless of high unemployment rates.
Clearly businesses need staff to fill those high vacancy rates as resignations continue at market highs with people looking to change employers or lifestyles (or both).
The costs to business of resignations and replacement are well established: total costs can range as high as 4 times the annual package when the effects of lost productivity on the way out, gaps while finding a replacement, recruitment costs and lower productivity while the person gets up to speed are taken into account. But while ongoing succession planning should be a key management, and board, responsibility with prospective candidates for roles, both internal and external, identified well before the need arises, this often lapses in the face of competing priorities.
The best-run businesses maintain a strong succession culture, planning well in advance for the skills they expect to need, and identifying the career progression for all staff, ensuring a regimen of ongoing training. And, for most employees, especially those identified for future leadership roles, cross-training across departments is essential. It not only provides for a deeper level of skills and understanding of the business, but is a strong motivator for the people and ensures better team collaboration, too, as this article shows.
It also aids problem solving at all levels in the business; where people understand and can empathise with the role another person or department plays in their own responsibilities, they’re better able to work together to resolve issues.
And, of course working with your staff to develop them throughout their career and give them the opportunity to work in different areas – perhaps even unlocking hidden talent in this way – will keep them motivated and less likely to leave for those often-disappointing ‘greener pastures.’
An understanding of as many parts of the business is also key for leadership development, enabling the future leaders to better understand the complexities of each area and role and so be alert to potential improvements to policies, procedures and systems in them, while this understanding will enable them to play more significant roles in strategy development, too, as they progress.
At a time of steadily rising costs due to inflation, a persistent skills shortage and a looming recession which could eat into your revenue, managing your staffing costs – often a company’s single biggest overhead – is more crucial than ever.
Have you implemented a comprehensive staff / team development policy and succession plan as a key component of your business culture and strategy?
I work with successful owner-led businesses to enhance their growth, profitability, cash flow and business value.
If you’d like to have a conversation about your business, executive and board skills and structure, or any other business challenges or concerns, book a free 30-minute call with me here. I’d be delighted to talk with you.
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If you’d like to learn more, you may find these related posts worth reading:
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- The 6 Biggest Fears of CEOs
- 7 Biggest CEO Mistakes and How to Avoid Them
- “Leading isn’t a position; it’s an action.” – Adam Contos
- The Power of Accountable Leadership
- “Excellence is Not a Skill. It is an Attitude.” – Ralph Marston