Insolvency offers a rewarding and varied career where professionals use a range of skills to help companies and individuals deal with serious financial issues. The challenges of retaining skilled talent in the insolvency sector are ever-present, however.
As in any industry, high-pressure work and responsibilities may lead to employee burnout followed by a desire to move on, but with the right support system in place insolvency firms can respond positively and retain their staff.
High employee turnover can ultimately affect a company’s bottom line. If staff aren’t retained and employees regularly leave, it can also damage a firm’s reputation within the sector.
So what are some of the challenges that insolvency companies face in terms of talent retention, and how can they be addressed to develop a loyal workforce and more stable and resilient business?
Strong competition for skilled talent within the sector
Insolvency is a relatively small sector and strong competition within it can present a challenge for employers. The draw to move to another company may be strong for employees if their skills are in high demand and rival companies offer significantly better compensation and benefits.
Firms can be intentional with their talent retention efforts by providing a working environment where dedication and hard work are recognised, and where beneficial working terms and conditions become the catalyst for long-term staff engagement and loyalty.
Attraction of working in other financial and legal areas
Those working in the insolvency sector may be drawn to other financial or law-related professions. Insolvency as a whole offers diverse opportunities, however, where staff can combine their expertise and interest in financial and legal work.
Newly graduated or established finance and law professionals may adopt a broad range of insolvency roles that utilise their skills whilst providing a varied working life that consistently draws on different facets of their knowledge.
Better promoting insolvency as an attractive and diverse career option is a first step in improving recruitment rates, but can be followed up with clear progression opportunities to retain skilled talent for the long term.
Challenges for smaller firms within the sector
The insolvency sector can experience cycles of increased and decreased activity that mirror the nation’s economic health. When the economy slumps insolvency firms may experience periods of intense demand as individuals and businesses look to them for professional guidance and support.
The emergence of smaller ‘boutique’ insolvency companies and the subsequently reduced dominance of the corporates have changed the landscape slightly within the industry. This can create an issue for smaller insolvency companies in retaining staff, however – given the increased workloads and pressures at busy times, smaller insolvency businesses may not have the additional workforce to call upon.
Targeted recruitment and retention
Developing a cohesive strategy addresses the challenges of staff retention in the insolvency sector and builds resilient businesses. This could include using specialist recruitment agencies that understand the sector, for example, networking effectively, and providing the supportive working environment that staff are looking for.
Having a system in place where discord or dissatisfaction with work is identified and discussed with a view to improving the situation can also head off staff resignations. If a member of the team does leave, however, a diligent exit interview can also reveal issues in the workplace that managers may not have known about.
Retaining skilled talent can present one of the biggest challenges for the insolvency industry but if addressed effectively it will improve business stability and resilience, and provide the foundation for building and maintaining a stronger presence within the sector.
About the author – Shaun Barton is a partner at Company Closure and boasts a wealth of experience in helping directors of distressed companies understand their options. A director-facing adviser, Shaun is often the first point of contact for business owners in financial distress, consistently delivering expert advice when it is needed the most.