By Steve Harry*
After what can only be described as a tough few years for UK businesses, things finally are starting to look up. A recent report published by High Fliers, a recruitment research company, reveals that the UK’s leading employers are offering 8.7% more entry-level vacancies than last year – the most significant increase in graduate recruitment in the past four years. In the accountancy sector, the number of graduate vacancies has risen by 7.2% since 2013 which is good news for both firms and young professionals alike. With the sector’s reputation as the ‘university of business’, and the many opportunities this will open up for training and career progression, it’s important for firms to attract and invest in the top talent from the annual graduate pool.
As the economy picks up, the recruitment and retention challenge is only going to intensify, and in a profession so firmly rooted in the knowledge of economy this is a major concern. Smaller and medium sized firms will gain the confidence to take on more graduates where previously they may not have had the capacity to do so.
Moreover, as progress is made towards the internationalisation of accountancy standards, the big four will have to compete with major players in the US and European market as well as smaller and medium sized firms in the UK. The question that top UK firms must ask themselves, therefore, is how they differentiate themselves from their competitors to attract and retain the best talent.
In a sector dominated by limited liability partnerships, career progression and the climb to partner will always be a priority, but in the fight to snap up and retain the best people firms must also focus on how they’re incentivising prospective staff beyond promotion, basic salary and bonuses – particularly as many firms have been reluctant or simply unable to commit to pay rises in recent years, and bonuses are generally getting smaller. Indeed, as the recent report from the Chartered Institute of Personal Development (CIPD) shows, average regular weekly earnings are now between 8% and 10.4% lower in real terms than in January 2009.
As such, many prospective graduate employees are now paying much closer attention to the broader employee benefits package on offer – and are looking far beyond pension provision, following the introduction of auto enrolment – when considering which firms to apply to. Indeed, original research by Unum shows that 71% of people are more likely to take a job if the employer offers good benefits. In addition, economic uncertainty has led to employees placing far more importance on employee benefits that provide long-term financial security. These include products like medical insurance or income protection. The latter pays a regular monthly income to staff if they are off sick for more than six months and is one of the few benefits to provide a payback for businesses if they need to claim – through not having to pay occupational sick pay and indirect cost savings associated with replacing staff, recruitment, and absence management.
Getting the incentives right is important, but as the recruitment drive draws to a close and the candidates are chosen, it is equally important to effectively communicate the benefits on offer in order to retain talent; this is true for both the graduate intake and the existing members of staff on whom firms rely to provide high-level consultancy advice.
According to research by Cass Business School, commissioned by Unum, failing to tell staff about the employee benefits on offer is costing UK businesses £396.6mn every year through increased staff turnover and sickness absence. In short, if the real value of the benefits on offer is not properly communicated, staff turnover is likely to increase and firms will fail to realise any value in investing in strong benefits packages.
The significant increase in the number of graduate vacancies in the accountancy sector this year is undeniably a positive development, yet employers should not neglect the potential implications that this might have on attracting and retaining top talent. The big four need to step up; the new challenge posed by small to medium sized firms, and the continued challenge from international competitors, requires them to focus their attention beyond salaries and bonuses, and to give benefits packages the same amount of attention as their prospective employees are.
*Steve Harry is chief financial officer of Unum, a financial protection insurer