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The Real Cost of Recruitment and Retention in the Field Service Industry

November 29, 2021 - Team Management - 12 minutes

The old saying “you have to spend money to make money” is true, but it’s especially important to keep in mind when it comes to recruitment and retention. 

After all, it’s not just your money that you’ll be spending…


It also costs valuable time to ensure you’re hiring the right field service staff as well as using your energy wisely in order to retain employees. Together, they’ll help you to keep operations running smoothly.

Price

Both come at a price, whether that be financial or mental.

Whether it’s paying a decent salary to secure the right talent, fronting the money and taking the time to train staff, or keeping an open mind about attracting a younger workforce, these differing costs require consideration. When handled well, however, they can pay you back handsomely in the long run.

Let’s take a look at the real cost of recruitment and retention in the field service industry:

Of course, the main challenge for business owners and managers is then maintaining a healthy cycle of recruitment and retention.

By having an awareness of your budget and of your business’s ability to manage staff well, you’ll be able to keep other concerns and stresses at bay.

After all, when staff are made to feel valued, it will be reflected in the effort they put into their work and benefit the entire business!

The state of recruitment for field services

Before we dive in, it’s worth pausing to think about the following:

“For the sixth year in a row, skilled trade positions (electricians, carpenters, welders, etc.) were the hardest roles to fill.”

Field Service EU

How do we fix that? Well…

Workforce development starts with recruitment and continues with a full cycle of development, growth, and retention.

Field Technologies Online

Bruce Breeden wrote this for Field Technologies Online in 2017,  and his statement regarding recruitment and retention still rings true today:

“As field service leaders, we need to ask ourselves how we ignite the passion for field service, the industry, the dynamic field service engineer (FSE) role, skills, opportunity, and professional development. I believe our opportunity for recruiting and retention excellence starts with our leadership and passion for the industry, along with an equal degree of passion for creating a sustainable “system” to recruit, develop, grow, and retain field service talent.”

Field Technologies Online
Magnifying glass

Having a passion for what you do and the belief that it’s worthwhile can be an infectiously motivating thing. The points above are precisely what’s needed to reinvigorate the field service industry as it works to bounce back, not only from the pandemic but from the recruitment crisis it currently faces.

When you consider that “the average cost of employee turnover, based on the average UK salary, is around £11,000 per person,”Croner — and it’s more if they’re a senior leader or well-qualified employee, as a head engineer—you’ll want to ensure that this money is being spent on helping you find and retain the right employees.

This way, you can avoid the cost of rapid turnover. 

Below, we investigate how Bruce’s sentiment still rings true in light of what’s happening today, and the cost of recruitment and retention to field service businesses. 

Identifying what action to take

A whole host of current events are reshaping the future of field services—from Brexit, to the pandemic, to an evolving workforce strategy heavily influenced by technology. With that in mind, it’s in your interest to look at the current state of the field service industry and identify what you can do to change things for yourself, your employees, and work to create a legacy for generations who follow in your footsteps.

While the above statement might sound a bit grandiose, the idea of legacy is something worth considering.

After all, when you think about electrical, gas, plumbing, roofing, and other types of service businesses, many were (and still are) homegrown, family-run businesses. It’s true that finding the money to invest, recruit, and retain staff can cause a great strain compared to larger corporations. Of course, it’s not impossible…

Even from humble beginnings, a business can grow to an impressive size and gain immense value. Just take Pimlico Plumbers as an example. The company’s founder, Charlie Mullins, started with just 1 van & 1 employee in 1979. He grew the business to 442 employees with 269 vans by 2018 with a worth of over £100 million.

While the above might be an extreme example of growth (an average of 10+ staff per year for 40+ years), the cost of recruitment amongst all that is certainly something to keep in mind and it’s useful to ponder, especially if you’re striving for growth in your own business.

The cost of recruitment

The cost of recruitment certainly varies depending on the experience, qualifications, and industry you’re hiring for, meaning there are useful points (and costly averages) to keep in mind as you weigh up how best to approach recruitment.

[Businesses] need to budget carefully when taking on new staff to ensure they are not overextending themselves and creating unnecessary financial strains on the company.”.

Undercover Recruiter

You might want to hire five engineers to help you manage the demand for jobs, but if you don’t have the capital to successfully onboard these employees, it’s better to take a structured approach and build yourself up slowly and confidently. Not only can a rushed approach create a bad impression, but simply throwing money at a problem rarely works out well. 

As far as actual costly expenses go, depending on what strategy you pursue to recruit staff, the cost of recruitment and retention can vary wildly, as will your success in securing a candidate. 

Coins

As Undercover Recruiter continues to outline, a recruitment agency can end up costing you 20-30% of an employee’s final salary (an average of £5000), while the alternative of advertising on social media and using job sites could set you back £200-400 a pop. 

Alongside recruitment expenses, you’ll also have annual salaries, bonuses, national insurance, pension funds, training costs, office equipment / an engineer’s gear, and other extraneous costs like field service software licenses (i.e. say for Microsoft Office or an extra job management software license) to consider. Altogether, you could be looking to spend close to at least £50,000 in their first year of employment. 

Of course, considering the state of recruitment at the moment, there are novel ways to try and incentivize new employees to join your business. Take the need for HGV drivers as an example. While not every company has signing-on bonuses, some delivery businesses are offering £2000 in sign-up fees in order to attract staff (and other reports go as high as £5000)!

If you feel inclined and can afford even a tenth of this sum, it’s one way to incentivise a prospect to join your company. But again, throwing money at the problem can’t be the only solution, you still need a concrete strategy to ensure bringing them onboard goes well.

After all, it all adds to the expense of hiring a new employee.

It’s all too easy to misconceive how complicated and expensive the recruitment process is, but having an awareness of the cost and strategies needed can provide a valuable perspective. You also need to focus on the other important side of the recruitment coin, which is that retention can help you sustain your business.

Improve your branding

The cost of staff retention (and strategies that can help)

Improving the retention of your staff can play a huge role in tackling your own talent shortage. Of course, it’s a problem affecting the UK at large, as McKinsey states in their in-depth report into the future of work. In it, they highlight 3 ways that a business can address the skill gap (and reduce the cost of hiring and retention).

Upskilling staff

The first and most significant point highlights that businesses need to improve the staff they currently have on board.

Upskilling and “[building] new skills among existing employees” is a powerful way to impact your productivity and do more work, more efficiently, but with fewer people (and less stress, too!).  

They go on to explain that:

“The costs of firing and hiring can quickly become prohibitive, so the best way forward for the majority of positions is likely to purposefully upskill existing employees while replacing routine work with automated systems.”. 

Not only does upskilling employees help improve profitability, but it also significantly improves an employee’s motivation and loyalty to your business. 

Cogs and ideas

After all, by showing you’re prepared to invest in them, they’re far more likely to reinvest in you! Not to mention that as your staff already works with you, it’s far cheaper to upskill them than it is (as we’ve seen above) to try and find, hire, and onboard new staff.

Of course, by upskilling current employees, you’re going to make it easier to train new ones too, which can keep costs down in the future.

That’s particularly true where technology is concerned for a younger generation of employees, they will often “come with an increased knowledge of mobile solutions and technology” which can profoundly impact how well they pick up new skills and learn (Field Technologies Online).

The second and third points from McKinsey’s study discuss recruitment alternatives.

The second suggests that businesses can “rent” talent from external partners – which basically means making use of the “gig economy” while the third point suggests strategies for acquiring “talent from unconventional sources”, which means you need to get creative with your hiring strategy. Let’s briefly explore both:

The gig economy

First, and again, when you consider the cost of hiring a full-time, fully qualified employee yourself, outsourcing by “renting” a new hire (whether freelance or through partnerships with another firm) makes sense.

It saves you a lot of time and money from advertising, too. If your business is experiencing an increased demand for work, a hired hand who can temporarily help you fulfil jobs is a great option. 

You might even be able to attract that individual to full-time employment if the partnership works out well. 

Get creative with hiring

As for looking to “unconventional sources” for hiring opportunities, this is definitely a point about shifting your own attitudes toward hiring.

Engineer

We’ve talked before about how a misconception of what it’s like to work in the field service industry can put people off pursuing a career in trades, but it works both ways. 

Don’t just look for the hard skills you need, but instead keep an open mind about the soft skills (i.e. someone with drive, passion, and a basic skill set that underlies their ability to learn). It may surprise you how much easier it is to train someone up.

It’s often easier to teach someone the hard skills they need to thrive as an electrician, plumber, or gas engineer, even if they come from a wildly different background. 

“This gives [businesses] the opportunity to secure potentially high-performing employees at a low cost. Such individuals are likely to require some upskilling or retraining, but there are innovative capability-building approaches that are very cost-effective.”

McKinsey

With these alternative solutions and adaptive attitudes to upskilling your staff, you stand to save money while still attracting talent that will help your business thrive.

The impact of staff turnover on employee wellbeing

Customer

It’s clear that recruitment can take a financial toll, but it can also be mentally taxing. It’s important to keep in mind the impact it has on everyone from the business owners to the colleagues of the worker leaving.

Considering the workplace is a space where many of us spend a good deal of time, it makes sense that we form friendships and other relationships there.

When these fall apart, however, or are disrupted as they will inevitably be when a colleague leaves, it can cause problems.

For instance, “a whopping 70% of employees say that having a friend at work is the most crucial element to a happy work life. What’s more, 50% of employees with a best friend at work reported feeling a stronger connection to their organization.”

PeopleKeep

Having a good approach to dealing with staff turnover will ensure that when someone does leave, they leave on good terms.

If you want to improve the atmosphere at work and create a space people enjoy being a part of, then be sure to:

“ask for frequent feedback to make sure that these opportunities are perceived as being relevant and useful.”

Achievers

Really, it’s as simple as showing your employees that you care about them and their place within your company. To learn more about how to cope when someone does leave your business, take a look at how you can bounce back. 

The Takeaway

Undoubtedly, the cost of recruitment and retention can be high. The challenges facing the industry are nothing to shy away from either, though.

Of course, it’s only by having an awareness of the hurdles that stand in your way that you can hope to overcome them and, as we’ve seen, it’s perfectly possible to map out solutions that can help you.

By fostering strong working relationships and communicating well with your employees you’re much more likely to work productively together.

At the same time, when someone does leave, you’ll enjoy a smoother transition and be more likely to keep people motivated and productivity ticking over comfortably.


Speaking of communication, have you seen our Customer Communication Toolkit?

If you’re looking for a great way to create effective comms that keeps everyone on the same page, you won’t want to be without it.

Click below to explore more about how our guide—and the 10 free templates within it—can transform the way you communicate with your customers!

Customer communication toolkit

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I'm eager to share great stories, advice, and tips that can help inspire and motivate field service businesses to find success. It's that, or I'm hunting down the best bagel recipe I can get my hands on!