Beyond the Paycheck

A Competitive Market for Talent

Competition for talent is tight, but for business leaders, labour cost is also a concern. Fifty-five percent of mid-market leaders identify these costs as a barrier to business growth. Although slightly down from the highs of 59% in 2022, concerns about labour costs are still outstripping pre-pandemic levels, which averaged 45% in 2019.

However, for many firms looking to cut costs, reducing headcount is not attractive option. A record number of leaders (57%) cite the availability of skilled workers as a key constraint to growing their business. Businesses need to take a longer-term view when addressing labour cost challenges so they don’t find themselves short-staffed when economic uncertainty subsides and demand expands.

Availability of skilled workers and labour costs by sector

Record numbers of people have left their jobs since the pandemic. While most workers moved in search of higher salaries, World Economic Forum data shows that over two-thirds say they are seeking more fulfilment in the workplace. If the right skills are hard to come by externally, leaders need to build a long-term strategy for talent development to ensure that they have the skills they need at hand now while simultaneously creating an environment where their existing team can develop the skills that will be required to meet the firm’s future needs. 

Patrick Gallen, people and change consulting partner at Grant Thornton Ireland, comments, “Organisations across both the public and private sector continually need to review their approach to talent management and succession planning. They need a more strategic approach to workforce planning, specifically one that involves four different aspects.

The first aspect is to have an ongoing review of their ‘employee value proposition’ in a transient and hybrid world. Secondly, once they get employees on board, they need to have a plan in place for deploying them across various locations and countries. Thirdly, they must have a concrete strategy for helping their staff develop new skills and capabilities in the face of an ever-changing digital world. Finally, they must consider how they’ll retain staff in a competitive and full employment work environment.”

Angela Nalwa, managing director and people and organisation practice leader at Grant Thornton US, explains, “Competition for top talent is still fierce, and the continued surge in labour costs just adds to the challenge for mid-market firms. Post-Covid, the goal-posts have shifted and pay isn’t always top of an employee’s list when considering a role. The focus now is on the employee experience, and this is an opportunity for organisations to strengthen their culture, employee value proposition and overall employee engagement strategy.”

What are businesses doing to attract and retain future leaders?

Embedding an inclusive, empowering and diverse culture is a crucial goal for all organisations operating today. It allows for more cross-border thinking and breaks down silos, and it can be the catalyst for new and cutting-edge ideas. The right talent won't settle for anything less.

Shona O’Hea, partner at Grant Thornton Ireland, comments, “Today, people starting out on their careers don’t want to come in and do mundane repetitive tasks. They just won't stay. So firms have to have the right technology in order to make the job interesting and appealing. Investment in tech and AI will remove some of those repetitive, low value tasks and create more time for analytical higher end activities. And that will help attract new people and keep them as they grow their careers.”

In the face of uncertain economic conditions, emerging developments in working culture and technology are adding an element of dynamism to the business world and creating optimism among mid-market businesses. A talented and resilient workforce can provide companies with a lifeline during economic turbulence. Moreover, it can act as a springboard to capitalise on growth when times change. With the right people, and a good track record on ESG and DE&I, firms can maintain growth, weather the current global challenges and be ready to take advantage of new opportunities when the economic headwinds shift.