Posted — Wednesday 26.07.2023

The construction industry has long been a vital sector driving economic growth, infrastructure development, and employment opportunities. However, the year 2023 has witnessed a significant upsurge in construction insolvencies, posing substantial challenges to the industry’s stability. In this Insight, we will explore the reasons behind this increase and shed light on potential solutions, including the upscale services offered by Ingenium Talent Consultancy, to support distressed building businesses before it’s too late.

1. The Economic Landscape:

The global economic landscape has experienced a series of ups and downs, and 2023 has been no exception. Fluctuating interest rates, inflationary pressures, and supply chain disruptions have created an environment ripe for financial difficulties. These economic factors have placed considerable strain on construction companies, leading to an alarming rise in building insolvencies.

2. Rising Costs and Margin Squeeze:

One of the primary factors contributing to the increase in construction insolvencies is the surge in costs faced by construction firms. Skyrocketing prices of raw materials, such as steel and timber, have led to budget overruns and squeezed profit margins. The inability to pass these cost increases onto clients has resulted in financial instability for many companies.

3. Labour Shortages and Skills Gap:

The construction industry has been grappling with a persistent labour shortage and a widening skills gap. In 2023, the situation has been exacerbated, hindering project completion and increasing project costs. Construction companies are forced to pay higher wages to attract skilled workers, putting additional strain on their financial resources. The lack of skilled labourers and project delays have significantly contributed to the rise in building insolvencies.

4. Contract Disputes and Legal Challenges:

Construction projects are often complex, involving multiple parties and intricate contractual agreements. Disputes and legal challenges have become more prevalent in recent years, adding financial strain and uncertainty to construction firms. Lengthy litigation processes and the associated costs can cripple smaller companies, pushing them towards insolvency.

5. Inadequate Risk Management:

Effective risk management is crucial in the construction industry, yet many companies struggle to implement robust strategies. Failure to identify and mitigate risks can lead to financial setbacks and ultimately insolvency. Unforeseen events, such as natural disasters or project delays, can further exacerbate the situation, especially when contingency plans are lacking.

Upscale Solutions:

1. Improved Cost Estimation and Planning:

Construction companies need to enhance their cost estimation and planning processes. This involves conducting thorough market research, considering long-term price trends, and implementing contingency plans to cushion against cost overruns. Effective project management and meticulous budgeting are key to navigating financial challenges successfully. Ingenium Talent Consultancy can provide construction businesses with specialised expertise in cost estimation and planning to support businesses in distress.

2. Addressing the Labour Shortage:

To alleviate the impact of labour shortages, construction firms should invest in training and development programs to upskill their workforce. Collaboration with educational institutions and vocational training centres can help bridge the skills gap. Furthermore, embracing technology and automation can enhance productivity and reduce reliance on manual labour. Ingenium Talent Consultancy offers tailored strategies to attract and retain skilled workers, providing a competitive edge in the market.

3. Strengthening Contractual Practices:

Construction companies should prioritise robust contractual practices and dispute resolution mechanisms. Careful drafting and negotiation of contracts can help mitigate legal challenges and protect companies from potential disputes. Alternative dispute resolution methods, such as mediation or arbitration, can also provide more efficient and cost-effective resolutions.

4. Enhanced Risk Management:

Proactive risk management is crucial for construction firms. Companies should conduct comprehensive risk assessments, develop contingency plans, and establish effective communication channels among project stakeholders. Embracing technology-driven tools for risk analysis and project monitoring can improve decision-making and minimise potential risks. Ingenium Talent Consultancy provides specialised risk management solutions tailored to the construction industry, supporting businesses in distress before it’s too late.

The surge in building insolvencies in 2023 has unveiled significant challenges faced by the industry. Economic fluctuations, rising costs, labour shortages, and legal disputes have collectively contributed to this unsettling trend. However, by implementing upscale solutions, including the services offered by Ingenium Talent Consultancy, the construction industry can navigate these challenges and build a more resilient future.

By adopting a proactive and adaptive approach, construction companies can mitigate financial risks, enhance project outcomes, and contribute to a more sustainable and thriving industry. With the support of Ingenium Talent Consultancy, businesses in distress can receive specialised expertise to address the unique challenges they face, helping them regain stability and success.

For more information about Ingenium Talent services, please contact Michelle Johnson – michelle.johnson@ingeniumtalent.co.uk

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Posted — Wednesday 15.05.2023

The construction industry has seen a dramatic and sharp rise in company insolvencies which is forecast to continue during 2023. As reported by the Insolvency Service, in 2022, the construction industry experienced the highest number of insolvencies of any sector in England and Wales, with 4,143 company insolvencies reported, accounting for 19% of all company insolvencies.  We must be aware that the construction industry usually has the highest quarterly number of insolvencies of any industrial grouping. The amount of company insolvencies in the construction industry had almost doubled compared to 2021 (with 2,579 company insolvencies reported). 

According to a recent report from Red Flag Alert, a “perfect storm” of factors could lead to more than 6,000 company insolvencies in the UK construction sector during 2023, and it warned that over 100 firms in the sector could collapse each week.  

Several components have contributed to this “perfect storm”, including the long-term effects of the COVID-19 pandemic, the Russian-Ukraine conflict, inflation, and the increase in energy prices. According to the ONS, in October 2022, just over 12% of Business Insights and Conditions Survey (BICS) respondents from the construction industry perceived energy prices as the main concern for their business between late February and early October. In this period, almost 41% of respondents saw inflation of goods and services as the primary concern for their business.  

Given these contributing factors, it is expected that many construction projects will suffer delay and/or termination, and commercial parties will seek ways to maximise recovery, leading to a rise in contractual disputes.

The risk of insolvency can be reduced if you monitor your finances. You should compare actual performance against your budget. If problems arise, it’s important you take action early. You should consider:

  • improving cashflow
  • negotiating with creditors
  • getting advice from professionals

Improve cashflow

Keeping cash flowing into the business is a challenge. Ways to improve your cashflow include:

  • bill promptly to ensure a steady flow of cash
  • avoid overtrading by only accepting orders you can fulfil
  • recover debts by chasing up debts owed to you
  • trim your inventory using a stock reduction plan
  • renegotiate your credit limits and payment dates with suppliers
  • reduce overheads such as wage costs

You can get advice from your accountant on how to improve your cashflow.

Negotiating with creditors

Don’t ignore your creditors. If you are a sole trader and they are owed more than £5,000 or, in the case of a limited company or partnership, they are owed more than £750, your creditors can apply for your bankruptcy or ask the court to wind up your business.

Talk to your creditors before you become formally insolvent. You should try to renegotiate any deals you have with them. You will need to be realistic and honest about what you can afford to repay them.

Expert advice

If your business is navigating the turbulent waters of “the perfect storm”,  you should seek professional advice. This will give you time to assess the alternatives open to you.

At Ingenium Talent, we have first-hand experience in supporting businesses through challenging periods. We have supported our clients in mitigating insolvencies and also helped others through the processes. You should get in touch immediately if:

  • you cannot cover your debts
  • the business receives a statutory demand
  • you cannot pay staff wages
  • there is an acute lack of working capital

Alternatively, if you can see the storm on the horizon, get in touch for a free consultation on how we may be able to help: michelle.johnson@ingeniumtalent.co.uk

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Posted — Wednesday 15.03.2023

Logistics is a crucial aspect of construction management that cannot be overlooked. A sufficient logistics plan can turn a complex construction project into a well-orchestrated event with lower costs and more efficient processes. 

Creating a Construction Logistics Plan – A Collaborative Effort

A group of construction professionals from businesses such as Mace, Laing O’Rourke and Skanska came together recently to create an agreed standard for the role of a construction logistics manager. Furthermore, TfL (Transport for London) has established a 51-page ‘Construction Logistics Planning’ document that firmly puts ownership on all contractors to ensure that the plan is implemented and measured on all sites. But creating a construction logistics plan requires attention to detail, thorough research, co-operation from teams and suppliers, and a flexible, if not different mindset to embed the right tools which streamline logistics so that everyone involved can understand what comes next.

The role also now features as part of the Built Environment degree qualification so the future of the construction industry will also be seeking logistic construction management. 

Precise Timing and Seamless Flow: The Essence of Construction Industry Logistics

Logistics in construction management is all about getting people and resources where they need to go at precisely the right time. Whether on-site, in storage, or in transit, construction industry logistics is about knowing where your materials and resources are at every stage of the project. Without a proper logistics plan for a construction site, possession windows, flow blockages and progressive programme delays are more likely and could have a higher negative impact on operations, and project success. 

Materials and equipment must arrive on time, at the right location and without any damage so that workers can make productive, efficient progress toward task and project completion. When those materials do come, logistics professionals should have space, equipment and personnel ready receive such deliveries, and direct or store them in the appropriate locations. 

Logistics is particularly vital in the construction industry as companies lose money as soon as one piece of the puzzle is delayed. Without professional logistics, it is impossible to complete projects on time, on budget and according to client specifications. 

With supply chain networks going through a transformation of their own, it is more imperative than ever that Clients recognise that they need to have a different sort of resource managing critical risk in projects and this is the Logistics Professional.

Partnering with Ingenium: Your Gateway to Expert Logistics Talent

Ingenium not only has world-class in-house Major Projects experts of their own to offer Advisory & Risk Management Solutions but we are excited to partner with a best-in-class Logistics industry recruitment specialist to support our construction clients in searching for the right construction logistics managers. We have access to the top talent from some of the world’s top logistics operators. To discuss your needs further, please get in touch michelle.johnson@ingeniumtalent.co.uk

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Posted — Wednesday 10.11.2022

The Covid-19 pandemic forced an immediate need for remote working and, for a period, this even in construction.

While trade labourers remained on site, construction companies sent several support service employees home, such as estimators, quantity surveyors and engineers.

Now, we return to normal working practices, many construction leaders are questioning what their new normal is. Can they support their projects remotely? Is it fair to have some staff remote and others on site? 

PCW’s recent remote work survey found that 55% of respondents said they’d like to work remotely at least three days a week. Other surveys have also found people are more willing leave jobs than to return to the office full-time.

So, with the current war on talent, construction leaders are also second-guessing what working practices to adopt to attract, retain and engage their talent.

Back to portacabins and site offices but not all?

Accommodating a hybrid working model outside the global pandemic backdrop can require a mindset shift for some employers who may worry about productivity or company culture. But research shows many of those worries are misdirected. 

When asked by the CIPD about increased home/hybrid working in October/November 2021, over two-fifths of respondents (41%) said the new ways of working had increased productivity. Equally, a report on the future of work after Covid-19 conducted by McKinsey (global management consultancy) found that 15 to 20% of construction employees’ time is spent on tasks that can be done remotely.

Estimators, planners, quantity surveyors and office administrators are among the individuals with the potential for remote or hybrid schedules, experts say. Some may be required to work on-site occasionally to check in on progress and nurture relationships. But if they are already balancing site work and office work, there’s no reason why that office must be company premises. Leaders need to decide if the company culture, processes and communication are aligned to support a two-tier way of working. 

Big players setting the scene 

As many large contractors and consultants have already moved towards remote and hybrid working models, leaders should consider the challenge of attracting new talent who now have greater demands for work flexibility. In February 2022, more than three-quarters (78%) of those who worked from home in some capacity said that being able to work from home gave them an improved work-life balance (ONS). 

It is vital that you stay aligned with your culture. If you have commitments to clients that require a full-time site presence, then accept hybrid working may not be suited at this time. Ensure that you are consistent in your approach in order to retain existing staff. If you offer a recruit hybrid working when existing staff have been told to remain on-site, you will start to disengage your teams! 

Remember, if the applicant is the right fit for your company and culture, they will understand why their role needs to be performed on-site.

Rising costs and reducing emissions 

In a time of rising energy costs, leaders are under pressure to re-evaluate overheads and consider reducing office space. For some, the space may have already been reduced, which will have helped make the choices on the future direction of working locations. 

Furthermore, many companies are driving down emissions, and so corporate social responsibility targets have been achieved with ease while employees have remained at home. But is it right and appropriate for your business to prioritise this over and above other business objectives, such as client needs? Ask yourself what impact it has had. Was it positive, or have there been compromises? 

How technology can support your choice 

Others argue that with advances in technology, such as virtual reality tools and drones (for site inspections), the sector should use this opportunity to embrace remote working where feasible. Consider your future technology strategy. If you are planning to embed technology that enables remote site visibility, do you want to stop and start remote working? 

Making your choice and crafting your policies 

It is important when designing your work location to ensure that you consider your supplier, client and employee motivators and circumstances, their demographics and what drives each.

If you choose to adopt a hybrid working model, be clear in communicating your expectations. Employees seek fairness and will want to know the rules. 

If adopted, carefully consider the mechanics of temporary hybrid working. Can employees set their own working pattern? How is this communicated with the team? Should a manager approve whereabouts on a weekly basis? How will you decide what roles can be permanently hybrid? A hybrid working policy will set your expectations and be available for all current and new employees. 

We help you develop the right policy for your company and culture and support you in embedding new ways of working. 

Contact us to discuss (michelle.johnson@ingeniumtalent.co.uk).

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Posted — Wednesday 13.10.2022

It’s no secret that retaining top talent is key to promoting business growth. Recruiting and retaining new employees is expensive and time-consuming. Moreover, turnover negatively affects the productivity and morale of your employees.

The cost of employee turnover is higher than you may think, clocking in at an estimated £30,614 per vacant position. That’s a relatively conservative estimate, as well, given current labour market conditions. In the context of small and medium businesses, absorbing a cost on that scale is nearly unthinkable.

You also need to consider the impact of not having someone there to do that person’s work. That could slow down a massive project and also produce higher overtime costs as existing staff pick up their work. It may simply lead to a reduction in staff morale as they struggle with increased workloads. In turn, you may find others then choosing to resign due to the increased pressure. 

Employee retention can therefore become an ongoing cycle. The CIPD Labour Market report (spring 2022) points toward the increasing importance of retention in meeting staffing needs. Therefore, the need to adopt effective retention strategies has become increasingly prevalent.

1. Update your workplace model

Flexible work arrangements have become critical ingredients for talent retention. 

Employees want options apart from the traditional 9-to-5 office jobs. Hybrid models and remote-first companies are attractive options that also provide employees with the desired flexibility. Updating your work model by adding flexibility will result in improved employee engagement and, in turn, retention. 

How to get this right:

  • Design a workplace policy that defines arrangements for hybrid or remote work, such as guidelines on asynchronous communication, virtual meeting attendance, and schedule availability.
  • Communicate new policies to all stakeholders so they are acquainted with the procedures, expectations, and goals regarding performance and productivity.
  • Diarise periodic reviews to adjust your policy according to employees’ performance and feedback.

2. Focus on work-life balance

The challenges of the past two and a half years have made employees rethink the true meaning of work. Now that more people are working remotely, the line between work and home has started to blur.

Work-life balance is considered the most important factor for nearly a quarter (24%) of professionals when considering a new role (Hays Pay Survey). 

Employees who don’t have a good work-life balance will likely reconsider their future at your company, so designing wellness initiatives is critical.


Employers must build a company culture that prioritises employee wellbeing, which means giving them more control over their work, flexible timetables, reasonable capacities, and emotional support.

How to get this right:

  • Consider using external support to design an appropriate well-being strategy that supports your employee demographic and needs. 
  • Educate line manages in mental health, and consider Mental Health First Aid training. 
  • Encourage employees to take time for themselves and adopt healthy lifestyles.
  • Partner with an Employee Assistance Programme provider that provides counselling for personal and work-related issues.

3. Pay attention to feedback

According to Herzberg’s famous Two-Factory Theory, employee retention and employee motivation are interdependent. So, it is important to know how your staff feel about your business and what motivates them. Sending out engagement surveys and asking for feedback is an effective strategy to learn about your employees’ perspectives and needs. It’s an important metric that allows companies to determine whether they are meeting expectations or falling short. But this information is useless if no action is implemented. If you collect employee feedback, put it into practice by executing changes and making alterations.

Listening and acting on feedback builds trust and is an important sign to employee engagement and well-being

How to get this right:

  • Consider using external support to ensure that your survey is fun and creative. You can use polls, games, and visuals to make it a positive experience for your employees.
  • Show your employees you are listening. Take some of the greatest ideas and put them into practice. Be cautious not to implement these changes radically — do it gradually so that employees have time to adapt and adjust.
  • Measure employee performance and engagement to gauge the impact of these changes.

4. Empower autonomy

New research (Birmingham University Business School) into workplace culture has found that employees with higher levels of autonomy in their work reported positive effects on their overall well-being and higher levels of job satisfaction.

How to get this right:

  • Ensure your manages are not micromanagers’; focus on building a culture of trust. This not only makes employees feel valued, but eager to perform at their best.
  • Give your teams the tools and learning opportunities they need to do their job whether they work remotely or in an office.
  • Set up regular one-on-ones to review progress, discuss concerns, and celebrate success, not to control your employees.

5. Cultivate inclusion

Cultivating inclusion can positively impact employees’ well-being, and productivity. Inclusion is also key to a rich company culture, which leads to innovation and creativity. Diverse teams give employees a sense of belonging and connectedness to the company. Employees with a strong sense of belonging are six times more likely to be engaged.

How to get this right:

  • Focus on building cultural competence to understand, communicate, and effectively manage diverse teams.
  • Prevent discrimination with education. Organise training, and ensure employees and managers know about potential cultural biases.
  • Define anti-discrimination policies and outline procedures to report any trouble or concerns.

6. Promote communication and collaboration

Promoting communication and collaboration leads to a positive employee experience. With open communication, employers can build trust and engagement among teams. Collaboration is also key to a more transparent, productive, and happier workplace, and therefore, higher retention rates.  

How to get this right:

  • Make sure to enable open channels of communication and collaboration tools, such as Teams, Slack, Trello, or Zoom.
  • Welcome constructive feedback and promote a safe environment for sharing and discussing ideas.
  • Create team-building initiatives that promote cross-departmental teamwork and communication.

Souring and securing employees can be complex; however, retaining top talent is the real challenge, which is why Ingenium Talent is with you every step of the way. We help you develop the strategies above (workplace policies, engagement surveys; well-being policies; diversity policies and cultural competencies) hire, onboard, and coach teams so you can focus on scaling your company.

Contact us to discuss how we can help (michelle.johnson@ingeniumtalent.co.uk).

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Posted — Wednesday 29.09.2022
  1. Actually knowing who you need

Most hiring managers typically want to fill their open positions as quickly as possible. And because of that, sometimes they won’t take the time to determine what kind of candidate they really want and need. 

How many times are we guilty of brushing off the previous job description, specification, remuneration etc for the role and replacing it with a like-for-like? 

Take the time to assess your current team first, establishing a clear overview of the skills and behaviours within your team. 

Is there scope to do something different? 

Could you make savings and broaden the roles’ responsibilities?

Is the previous role still fit for purpose in your current operating model?

Take the time to consider your talent pool and if there are any successors waiting in the wings. This will help you determine exactly what to look for in your next hire.

  1. Write more accurate job descriptions

One thing that frequently gets overlooked during the hiring process is the purpose of the job description. The purpose of the job description isn’t just to tell candidates the duties of the job. Its true purpose is to attract the right candidates and set the right expectations about the position, the company, and the culture. 

Because of the typical rush in the hiring process, the hiring manager may not spend enough time developing an effective job description. And when this happens, the result is either a deluge of unqualified candidates or a trickle of candidates who can only meet super-specific demands. 

Take the time to create a list of top qualities, certifications, and education that you want to see within the applicants for the position. 

When you produce a job description that gives a true likeness of the position along with preferred and critical qualifications, you decrease the amount of time you will spend interviewing, which will, in turn, speed up your hiring process.

  1. Preserve diary time 

As the need for speed is so important to hiring managers, it is vital to make appropriate time for the process. So many times, hiring managers receive CVs and don’t have time to review them. Similarly, they find themselves unable to commit to interviews for two or three weeks. This is incredibly frustrating for recruiters and candidates, who are waiting eagerly to kick start the process. 

Upon posting the vacancy, sit down and schedule time later that week and the following week to screen CVs. By assessing your candidates early in the process, you allow yourself to spend time interviewing the high-potentials only, resulting in a shorter time-to-hire and less time spent per hire, while simultaneously improving hiring quality.

Then schedule two-hour diary slots over the next seven to ten days for interviews. 

  1. Make the most of the interview

After screening applicants, the next step is to interview the top candidates individually. When interviewing, you’ll want to follow some interview etiquette in order to retain candidates during the hiring process. 

  • Don’t involve too many stakeholders in the process or decision
  • Only ask questions that have a purpose and will help you glean insight
  • Have a structure behind the questions you’re asking
  • Follow up, follow up, follow up
  • Don’t be time bound – take the necessary time to get to know your candidate 
  1. Find the balance between speed & quality

Focus your time on the right people, decrease the number of candidates to interview and the number of steps in the process (after all, you’ll already have the required insights at the start). This allows you to find a balance between hiring speed and hiring quality. 

If you and your team find certain steps confusing or lengthy, the chances are your candidates do, too. Identify where you can cut out cumbersome procedures, streamline work, and improve communication.

By making changes like the ones outlined above, you’ll speed up your hiring process and create an interview procedure that makes everyone’s lives easier, yours and the candidates’ included.

Contact us to discuss how we can help (michelle.johnson@ingeniumtalent.co.uk).

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Posted — Wednesday 08.09.2022

As consultants, we approach pay, reward, and benefit reviews by evaluating the existing pay system’s suitability for the new emerging reality. We address essential questions, such as the fairness of the pay approach, whether it encourages desired behaviors and performance, and its financial sustainability for both the organization and its employees. Additionally, we explore the relevance of linking pay to work location and the balance between financial and non-financial rewards.

Finding the Right Balance: Financial vs. Non-Financial Rewards

Studies have proven that financial rewards retain employees for 2-3 years. However, without offering adequate career development opportunities, employees may eventually seek new opportunities elsewhere. On the other hand, non-financial rewards can retain employees for 4-5 years, creating a sense of support and fostering a creative culture. Nonetheless, relying solely on non-financial rewards may not be sufficient, as financial needs and circumstances change.

To strike the right balance, organizations should blend financial and non-financial rewards. This approach involves providing competitive pay and benefits while also offering other non-monetary incentives to support employee well-being and engagement.

Impact on Employee Retention

Employers have responded to recruitment challenges by raising pay (44%), upskilling existing staff (39%) and advertising more jobs as flexible (38%). However, employers may have reached a limit to how much further they can go on pay: only 27% anticipate raising pay to address recruitment challenges in the next six months. 

Employers’ top response to retention difficulties was the same as their top response to recruitment difficulties: to raise pay (52%). Again, there is a difference between what employers have done in the past and what they plan to do in the future, with just 36% saying they will raise pay in response to retention difficulties in the future. Forty per cent of employers with retention difficulties have put a greater focus on employee wellbeing, and 39% have improved flexible working arrangements.

Of those employers planning a pay review, an increase in pay is the most popular option at 44%. However, around three in ten (28%) think it is hard to tell, and around a fifth (18%) do not know. Eight per cent expect a pay freeze, and only 2% expect a decrease.

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‘Without a doubt, reward needs to be aligned to business performance, objectives and values. However, ensure you’re not just the best place to work but the best high-performance place to work.

If you would like assistance with aligning your pay and business strategy, please get in touch

Changes in pay and benefits planned for the next 12 months in response to recruitment and retention challenges:

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Transparency 

42% of employers don’t believe their organisation is consistently transparent about how pay levels and pay rises are set, higher than the UK average of 35%. Clear pay transparency (valued by 69% of professionals), will be key to improving both talent attraction and retention in the year ahead.

The 2019 CIPD Reward Management survey found that most employers did not have a definition of what they consider to be fair. If a definition did exist, it wasn’t widely shared. Having this definition in place is essential if employees, investors and customers are to view the organisation as a fair employer. 

Benefit and Balance Expectations 

The most important benefits to professionals seeking a new job include having over 28 days of paid annual leave (45%), a pension provision above the legal minimum (41%) and health insurance (40%). COVID-19 has created scope for additional benefits and factors to look for in a new role, with 42% of professionals saying they would like additional days off work for wellbeing, and a quarter (28%) citing additional payments to cover housing costs as a useful benefit (Hays Pay Survey). 

Work-life balance is considered the most important factor for nearly a quarter (24%) of professionals when considering a new role, with remote working (36%) the most sought-after flexible working option (Hays Pay Survey). 

During the pandemic, businesses have become more people-centric, rethinking employee experience that respect individual needs. Managing transitioning workforces is commonplace, with many restricting reward in response. This includes a broader reward offering with more options around wellbeing benefits to suit individual circumstance. Now is the time to rethink the employee experience in ways that respect individual differences and potential hybrid working models (HR Management Magazine, January 2021).

Embracing the ‘New Normal’

In the current landscape, customers and investors show heightened interest in how organisations treat their employees, particularly in terms of rewards and benefits. Employers must thoughtfully respond to this pressure and seize the opportunity to enhance their benefits package.

To ensure a fair and effective pay and reward approach, it is crucial to define what constitutes fairness, increase transparency, and seek employee input on reward preferences. By blending financial and non-financial rewards and aligning them with business values and performance, organisations can become high-performance workplaces that attract and retain top talent.

If you need assistance in reviewing your pay and benefit offerings, get in touch with us at michelle.johnson@ingeniumtalent.co.uk. We can help you develop a well-balanced and competitive rewards strategy that aligns with your organisation’s objectives and values.

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Posted — Wednesday 30.08.2022

We have all heard it. Whether you have been the candidate, recruitment consultant, internal talent manager or someone who is part of the interview process, we have all heard the interview feedback, ‘They’re just not quite the right fit’. Other examples might include, ‘They just don’t fit in with the client and what the client needs’, ‘The cultural fit is not right’, ‘We can’t see them fitting into the team’, and the list goes on and on. 

Much like people, every individual organisation has a defined set of characteristics, or rather, a ‘personality’ that makes up its business culture. When organisations bring on new hires, they’re looking for people who agree with and fit in with their agenda – in other words, they’re looking for people who are a match for the company culture.

When a new hire shares similar fundamental values, beliefs, and goals with their business, they’re considered a cultural fit. While it seems like a simple idea, the key to understanding cultural-fit hiring is knowing that it doesn’t mean recruiting identical people.   Hiring for cultural fit is meant to result in a diverse and effective workforce; however, when this isn’t done effectively, it can do more harm than good to your organisation. 

In this Insight, we discuss the pros and cons of hiring for cultural fit and how it can impact your business.

Pro: Engaged Employees

It’s no secret that high levels of employee engagement are crucial for business success, and when an employee’s values align with those of their company, they’re more likely to be satisfied in their roles and remain invested for the long haul.

Employees who are in jobs that are a good fit for their personality are one thing, but when the overall company culture reflects their personality as well, they naturally become more confident in their role and work harder to achieve the desired results.

Pro: Saves Money

Every organisation wants to save money where it counts and hiring for cultural fit can help make that happen when it’s done correctly.

When there is an effective culture fit in place, employees will want to stick around because they feel they’re benefitting from a role they enjoy in a company they mesh with. This means that when you hire a qualified employee who also fits your company culture, you’re hiring for the long term, ultimately helping to reduce turnover rates and lower recruiting costs.

Pro: Company Promotion

When an employee feels at home in their organisation, they’re more likely to personify and promote the core values of your company to friends, family, and co-workers. Not only does this help with your organisation’s reputation as being a good employer and increase business morale, but it also helps in attracting fresh talent.

Word of mouth is a powerful thing, and when employees are happy with their company, they’re going to talk about it, which in turn, is certain to spark the curiosity of job seekers who are also looking to feel valued in the workplace.

Con: Low Retention

While hiring for cultural fit can save organisations money in recruiting costs, it can also have the opposite effect when it’s implemented poorly.

If your organisation doesn’t have a good understanding of the realityof its own culture – which means how the company culture appears to employees rather than what’s outlined in your values and mission statement – you might find that your employees aren’t as great a fit as you thought they’d be.

While there’s never any concrete assurance that a new hire will stay, when employees feel like they’re not a fit to company culture, or feel like they’ve been misled in the hiring process, they’ll more often than not choose to leave.

So, if your company relies heavily on hiring for cultural fit, and you’re seeing significantly low employee retention rates, it might be time to re-evaluate how you see your company culture – or to change your recruitment process.

Con: Focus on Personality

Too often, businesses make the mistake of choosing an applicant based on their personal traits rather than focusing on their skills and qualifications during the interview process.

Hiring an employee simply because they have similar values to your organisation is like hiring the same person repeatedly – cutting out a lot of opportunity for diversity that creates a balanced and efficient company culture in the first place.

By focusing more on personality than education and experience, organisations lose a well-rounded perspective in their company culture and even risk creating a bias against future hires who don’t necessarily fit the mould as well as others do.

Con: False Pretence

While job applicants can seem like a great cultural fit for your business, it doesn’t necessarily mean that they are.

In the age of technology, with so much information at our fingertips, it’s easy for candidates to research your organisation to understand its values and then imitate the qualities they believe you’re looking for in the interview.

This doesn’t necessarily mean that they’re being dishonest; it might just mean that they’re embellishing for the sake of a good interview in hope of having a better chances to being hired.

While some may call this preparation, the issue at hand is that focusing too much on what someone says in an interview is risky – meaning concrete evidence of their experience is necessary to properly reflect on whether they’ll be a good cultural fit and a good hire in general.

1. Study Your Current Business Culture

Review the level of inclusion and diversity in your business, and make sure that your company’s values allow room for your employees to grow. If your employees have the opportunity to grow, then your company will too, and you’ll be more likely to attract the right candidates from the start.

2. Be Open to Transformation

Things change fast and frequently in the working world, and job seekers want to work for companies that keep up with modern workplace tactics. Being open and flexible to changes will make your organisation more appealing, making applicants all the more eager to work for you.

3. Ask the Right ‘Cultural Fit’ Questions

A company’s culture is the ecosystem of the entire organisation and needs to run efficiently for businesses to develop and remain competitive. So, asking the appropriate questions to gauge how well they’ll fit in is key to finding the ideal candidate.

4. No Guarantee, but Signs of Success

No matter how effective your organisation’s recruitment tactics are, there’s never a guarantee an employee will live up to expectations – even if they seem to be the perfect cultural fit. You’ll know you’re on the right track, however, if you see a diverse, unified, and happy set of employees who are motivated to help achieve business objectives.

How to make sure candidates are a good cultural fit

Increasingly, businesses are recruiting for attitude and fit with the organisational culture in addition to looking for the best skills. That’s because there’s a growing understanding that people who have the right approach are more likely to be successful in the role and bring value to the business – and additional skills can always be learned.

A critical question for hiring managers is, ‘How can I tell if a candidate is a good fit for my culture?’ Fortunately, you can use the interview and selection process to help you see whether candidates are going to work both within your general culture and within the culture of the team or department you are hiring for.

What does ‘cultural fit’ look like?

The first thing to do is understand what ‘cultural fit’ means to your organisation. Without defining the type of people and approach that your business prefers, you’ll be unable to ask the right questions or to assess whether a candidate will be a good or bad hire. So, at the very least, have a checklist of the attitudes and attributes that you feel will make a good employee. These might include:

  • Innovative thinking
  • Willingness to take risks
  • Understanding of collaboration
  • Prioritising particular ethics such as inclusivity or environmental concerns
  • Ability and approach to working with others

Once you have a clear idea about what you want to see in a candidate, you can start to design questions to give you an understanding of what each candidate is about. You might want to refine your list to reflect the actual role you’re recruiting for, as well as the culture of the wider organisation. You should also include a couple of questions about the candidate’s leadership style, if that’s appropriate, and about their expectations of leadership in your business.

Some sample culture questions

Here are some great questions to begin understanding cultural fit:

’How do your co-workers feel about working with you?’ 

’Tell us about a time when you worked successfully as part of a team.’ 

’Describe your leadership style.’

’What kind of work culture makes you happy and productive?’ 

Understanding whether candidates are going to be a good fit with your business is a crucial part of your recruitment process. When you work with us, we build this into the early assessment process to help deliver high-quality final candidates. It should also form part of your standard interview approach – at every role level – to ensure that you are bringing the right people into your teams and making the most of your recruitment budget.

Get in touch today (michelle.johnson@ingeniumtalent.co.uk) to find out how we can help you find candidates that are a good cultural fit for your business.

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