Hospitality is just one sector where increased demand for talent could spell trouble. Photo: Shutterstock

Thursday 21st January 2016

The heat is on

What does a heated labour market mean for your people strategy?

It’s no news to anyone that the job market took a good old thrashing after the financial crash in 2008 – but the evidence suggests that, while employers have been distracted by the hardly-inconsiderable task of getting their growth strategies back on track during the economic uncertainty, the job market has sprung up once more.

Almost eight years after the start of the recession, we’ve been through a thaw, enjoyed ‘green shoots’ and felt the sun on our backs in a warming climate. But now the job market is sweltering in scorching temperatures.

In fact, according to a report from International Business Times earlier this month, the UK is one of the top three countries in Europe for jobseekers to get a job – coming in just behind Estonia and Norway.

Great news for jobseekers, but tough for employers. After eight long years of a cold war for talent, the advantage seems for now at least to be back in the hands of the jobseeker.

A heated labour market, such as this, pulls a number of strings in the HR agenda, with several organisations competing (read fighting) to attract the best talent, particularly since many of these businesses are in growth mode, thanks to the buoyant economic climate.

Demand for talent outstripping supply means people strategies have a clear and direct link to business performance.

In the hospitality sector alone there are gaps in management teams in restaurants, which have an immediate impact on service, sales and overall employee performance. If you couple a shortage of talent with high labour turnover – leading to management instability – you could find yourself ‘over-promoting’ individuals in a frantic attempt to fill vacancies and therefore diluting the operational strength of your business.

Without a robust targeted strategy you could find yourself in a tricky position – my view is that if you can’t stand the heat, get out of the kitchen.

But if you’re up for the challenge, your people strategy should focus on a number of key areas.


If you only do one thing, grow your own talent.

The people who are immersed in your culture and have grown through your business are likely to be highly engaged and great performers. Gaining absolute clarity on who your stars are and accelerating their growth with great training programmes can create a real win win outcome: they get a great career while you benefit from low recruitment costs and high performing individuals who are engaged.


If you’re worried you may have ‘over-promoted’ people, you will need to address this through robust performance management, working your way through the organisation from the top right down to entry level.

Culture and brand

Be clear about your unique selling point and your all-important Employer Brand: what makes your business stand out to savvy jobseekers? Remembering to listen to your people and get their views will have a huge impact on your brand.

In my organisation we developed an engagement strategy based on actively listening to our people on ways we can improve as a business. This led to a 17% drop in labour turnover within six months. It’s also helped us deliver our business projects more effectively by taking feedback from the floor.


A quick but effective recruitment process can’t be underestimated. Assessment centres coupled with behavioural interviews and working trials can be a highly accurate way of making sure the people you bring on board are high performers as well as a great fit for your business culture.

Don’t wait for people to apply for jobs with you – engage passive candidates through social media, internal recommendations or highly branded recruitment campaigns.


With a heated labour market, you need to keep a laser focus on pay inflation. Getting your pay position right is vital, as is the decision as to whether you want to be a low, mid or upper quartile payer.

Failing to get the rates of pay right or not having a transparent and consistent pay strategy can lead to you losing key talent from your business. At the same time, awarding high rates of pay but not having a strong culture could lead to inconsistent experiences for your customers.

If you invest in your employer brand, pay will not be the only draw for candidates. But if you don’t have a strong people proposition, you could find yourself over-compensating through being an upper quartile payer.

Taking the strategy of adopting a mid-point pay, while investing more in training, culture and engagement is more likely to strike the right balance for your people and generate a better return on your investment.

And last but not least: Induction

When you’ve recruited your dream team, don’t skimp on your induction process.

It’s important to invest in training and engaging new joiners in your culture from day one, so they not only perform their jobs to the best of their ability but also live and breathe your values and demonstrate them clearly to your customers and clients.

About the author

Mike Williams

Mike Williams is a commercial and pragmatic HR professional. Currently People Director for fast-growing restaurant brand Byron, Mike is well known for his ability to work strategically with private equity and corporate investors in order to boost turnover through highly engaged people.