Recruitment pressures have increased by more than 20 per cent during the past twelve months, despite the economic slowdown and wave of redundancies.
According to the Chartered Institute of Personnel and Development (CIPD), the problem exists across all sectors and regions with more than nine out of ten of the 557 organisations surveyed experiencing difficulties.
The CIPDís survey confirms the trend of the Ď3Rs effectí, where mass redundancy co-exists alongside recruitment and retention difficulties.
The three main causes of the problem include a lack of specialist skills, poor quality applicants and pay inflexibility, all of which are particularly acute in the public sector. The cost of living is also cited as a major reason - in London and the South East in particular.
Meanwhile, the number of organisations reporting retention difficulties has jumped even more markedly in the past year from half in 2002 to more than seven out of ten this year.
The problem is even more acute in the public sector, where more than eight out of ten report problems. Retaining administrative staff is also proving difficult. And more organisations in London report retention difficulties than in any other UK region.
Angela Baron, CIPD Adviser on Employee Resourcing and the survey's co-ordinator comments, "Recruiting and retaining staff remains HR's biggest challenge in spite of the economic downturn. While some may see this as surprising, a combination of low unemployment and a massive expansion in public sector recruitment has meant that staff at all levels, in all sectors and in all regions are difficult to recruit and retain.
"The problems are particularly acute in the public sector where the demand for trained specialist staff currently exceeds supply. However, this should even itself out over time as more trained staff come on stream."
One result of these recruitment and retention problems is that employers are now more prepared to train new recruits and lower the level of experience required. Seven out of ten organisations now say that they will appoint people with potential who do not currently meet the job requirements, while the use of coaching and mentoring has also increased sharply.
Although more than a third of organisations have improved their starting salaries to recruit staff, the number that have increased pay to retain staff has dropped, a reflection of difficult economic conditions.
But this pay inflexibility has led to almost a half of organisations losing candidates, with the public sector the biggest loser. More than six out of ten public sector organisations see pay as a major issue.
On the flip side, however, a greater emphasis on work-life balance has become the public sectorís key retention weapon. Half of public sector organisations offer flexible working hours compared with just a quarter of manufacturing and production organisations. Half of not-for-profit and public service organisations also offer both family-friendly and work-life balance provisions beyond the legal minimum.
When staff do decide to leave, three-quarters of organisations monitor the findings from exit interviews and six out of ten use staff attitude surveys. But less than a third monitor the financial cost of replacing leavers.