Skills shortages continue to be a significant challenge for businesses across many industries. Employers regularly tell us that experienced engineers are difficult to find, applicants do not always have the specialist qualifications required, and talented people are being approached by competitors before vacancies can even be filled. When this happens, recruitment naturally becomes a major focus. However, recruitment is only one part of the skills shortage conversation. When experienced and knowledgeable people are already difficult to find, businesses also need to consider how effectively they are retaining the skilled employees they already have.
Replacing somebody who did not necessarily need to leave in the first place can be considerably more difficult and expensive than preventing their departure. An experienced employee takes more than their job title with them when they leave. They can take years of technical knowledge, established client relationships, an understanding of internal processes and practical experience that cannot simply be replaced by recruiting somebody with similar qualifications.
Understanding where your biggest people risks are
Most organisations have employees whose departure would create a significant operational challenge. This might be someone with a specialist technical qualification, an employee who understands a particular system better than anyone else, or a long serving member of the team who has accumulated years of knowledge about the organisation and its clients. In other cases, the risk may come from a skill that has become increasingly difficult to find in the external labour market. A role that was relatively straightforward to recruit for several years ago may now take months to fill, particularly where a combination of experience, technical knowledge and industry understanding is required.
The difficulty is that organisations do not always recognise how dependent they have become on particular individuals until those employees decide to leave. At that point, attention quickly turns to covering responsibilities, protecting client relationships, transferring knowledge and beginning a recruitment process that may have no immediate solution. This is more than an HR concern. It is a genuine business continuity and workforce planning issue.
Retention needs to happen before somebody resigns
One of the most common mistakes with retention is waiting until an employee hands in their resignation before having a meaningful conversation about what would encourage them to stay. Once a valued employee announces that they are leaving, organisations can suddenly become remarkably flexible. A salary increase may become possible, working arrangements might be reconsidered, responsibilities can be changed and opportunities for progression may appear that had never previously been discussed. By this stage, however, the organisation is often trying to solve a problem that has been developing for months. The employee may already have accepted another position and mentally moved on from the business.
A more effective approach is to identify employees who are particularly important to the organisation and understand what matters to them while they are still engaged. If somebody would be difficult to replace, conversations about their development, workload, ambitions and experience at work should already be taking place. Retention should therefore be treated as an ongoing management responsibility rather than an emergency response to a resignation letter.
Salary matters, but retention is about more than pay
Competitive pay is an important part of retaining skilled employees, particularly when people with specialist experience have plenty of opportunities elsewhere. However, salary is rarely the only factor influencing somebody’s decision to remain with an organisation. The quality of management can have an enormous impact on an employee’s experience. Workload, recognition, flexibility, development opportunities, progression and workplace culture can all influence whether somebody can see a long term future with the business.
This is why benefits alone cannot compensate for fundamental problems in an employee’s working environment. An organisation can invest heavily in wellbeing initiatives and employee benefits, but those investments will have limited impact if employees consistently feel undervalued, poorly managed or unable to progress. Effective retention comes from understanding the overall employment experience rather than relying on one incentive to keep people in place.
Understanding what employees actually value
Businesses cannot develop an effective retention strategy without understanding what their employees value, and the simplest way to gain that understanding is through regular and meaningful conversations. These discussions do not need to be complicated or reserved for an annual appraisal or occasional engagement survey. Managers should have enough regular contact with their teams to understand what employees enjoy about their roles, what causes frustration, where they would like their careers to develop and what changes could improve their experience at work.
The answers will not be the same for everyone. One employee may be motivated by greater responsibility and the opportunity to progress, while another may place considerably more value on flexibility. Someone who has taken on additional responsibilities over several years may simply want their contribution and the development of their role to be properly recognised. Employers will not always be able to provide everything an employee would like, nor should retention mean agreeing to every request. What matters is having enough information to make informed decisions rather than discovering what somebody valued during an exit interview when it is already too late to act.
Retention should form part of wider workforce planning
Keeping experienced people is important, but organisations also need to consider what happens when those employees eventually move on. No employee will remain with a business forever, which means retaining knowledge can be just as important as retaining individuals. Businesses that depend heavily on specialist skills should consider how knowledge is being transferred across the organisation. Experienced employees can play an important role in developing junior colleagues, supporting apprentices and sharing technical knowledge that might otherwise remain with one person.
Succession planning is equally important. Where a critical process, client relationship or technical responsibility depends entirely on one employee, the organisation has created a significant point of vulnerability. Developing other employees takes time, which is precisely why workforce planning needs to happen before there is an immediate vacancy to fill. Building capability internally can reduce reliance on an increasingly competitive external recruitment market while also providing existing employees with meaningful development opportunities.
Employee retention is a commercial consideration
Employee wellbeing, engagement and development are sometimes described as the softer elements of HR, but there is a clear commercial argument behind getting them right. Recruitment has a cost. Training a replacement has a cost. Lost productivity has a cost, and so does the time other employees spend covering a vacant role. When somebody leaves with specialist knowledge or established client relationships, the wider impact on the organisation can be considerably greater. For employees who are particularly difficult to replace, good management and retention should therefore be viewed as part of protecting the organisation’s capability.
This does not mean treating certain employees as indispensable or agreeing to everything they request. It means recognising where critical knowledge and skills sit within the organisation, understanding the people who hold them and making sensible decisions about retention, development and succession before there is an urgent problem to solve.
Acting before the skills walk out of the door
A skills shortage should not only prompt businesses to look at how they recruit. It should encourage them to look carefully at the skills, experience and knowledge they already have. Understanding which employees would be particularly difficult to replace is a useful starting point. From there, businesses can consider whether those employees are appropriately rewarded, whether they have opportunities to develop, whether their knowledge is being shared and whether there are any underlying frustrations that could eventually encourage them to leave. The objective is not to prevent employees from ever moving on. That would be unrealistic.
Instead, it is about reducing avoidable turnover and ensuring that the organisation is not unnecessarily exposed when an important employee does decide to leave. If the departure of a key employee tomorrow would immediately make the business wish it had acted differently six months earlier, that is a strong indication that the conversation needs to happen today.
Planning ahead can reduce the impact of losing key skills. Find out more about our Succession Planning support.