Tag: Brexit

Job applications drop 37% as vacancies increase 52% 

The number of applications per vacancy have steadily decreased as the skills crisis continues to grip the UK, with figures dropping 40% between January and February 2022. That’s according to the latest data from the world’s largest network of job boards, Broadbean Technology. 

 

Applications tumble 

According to the statistics, the number of professionals applying for new jobs fell 37% between February 2021 and February 2022 as vacancies spiked 52%. While this data highlights a concerning picture for the UK’s skills availability, pre-pandemic comparisons provide a clearer indication of the talent crisis facing the recruitment sector. 

Broadbean’s analysis revealed a 55% decline in the number of people applying for new jobs between February 2019 and February 2022, indicating the extent of the impact of Covid and Brexit on the UK’s labour market. 

 

Sector breakdowns 

Across the sectors, the data reveals a significant decline in the number of people applying for roles across the engineering, IT, retail and healthcare sectors. In the retail arena, applications per vacancy fell 45% between January and February of this year, while figures in engineering and IT were down 41% and 38% respectively. Medical and nursing job applications also reported a 30% decline which is indicative of the continued pressure being felt across the healthcare sector as it attempts to play catch up on routine services following two years of significant demand. 

Alex Fourlis, Managing Director at Broadbean Technology commented: 

“The UK’s skills crisis has been well documented over the last year, impacting almost every business, of every size, across every sector. The uptick in recruitment activity at the beginning of 2021 was initially welcomed with open arms in a Covid-hit economy, but we all soon felt the squeeze on resources as we found ourselves in a unique scenario where everyone was recruiting at the same time. And while Brexit may feel like a lifetime ago, the impact this has had on the labour market wasn’t immediately felt, largely due to the pandemic. There is no quick solution to rebuilding dwindling talent pools and we fully expect this squeeze on resources to continue over the coming months. We do, however, expect to see more employers and recruiters using innovative technology and maximising partnerships with external talent suppliers to tackle this skills crisis.” 

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Number of self-employed workers remains low  

The latest Labour Force Survey (LFS) has been released and contains estimates for November 2021 to January 2022. The survey has shown a continued recovery in the labour market. The employment rate has increased on the quarter with a decrease in the unemployment rate. However, economic inactivity has increased slightly on the quarter.  

The UK employment rate increased by 0.1 percentage points on the quarter to 75.6%. Full-time employees drove the increase in the employment rate during the latest three-month period. While the number of part-time employees decreased strongly during the pandemic, there’s been a steady increase in these figures since April to June 2021.  

 

Self-employed data raises concerns around the UK’s skills stability 

The number of self-employed workers remains low following decreases through the coronavirus pandemic. 

Tania Bowers, Global Public Policy Director at the Association of Professional Staffing Companies (APSCo), raised concerns around the UK’s level of self-employed professionals and made comment: “The continued increase in vacancies being reported by the ONS is a trend we expect to see continue for some time yet and has arguably become the ‘norm’ for the staffing sector over the last year. However, the fact that the data does also show that the number of self-employed workers remains low following decreases during the pandemic is a real concern given the tight labour market we’re experiencing. With highly skilled resources scarce, the UK’s economic recovery rests on the ability to tap into flexible resources. However, since the roll out of Off-Payroll, Brexit and following significant challenges during the pandemic, the self-employed have increasingly been driven to alternative employment routes.” 

The ONS stated that its most timely estimate of payrolled employees has shown another monthly increase (up 275,000) in February 2022 to a record 29.7 million. 

The unemployment rate decreased by 0.2 percentage points on the quarter to 3.9%, while it’s reported that economic inactivity rate increased by 0.1 percentage points to 21.3%.  

During the pandemic, increases in economic inactivity compared with the previous three-month period were largely driven by those aged 16 to 24 years. However, interestingly the LFS has shown that the number of economically inactive people aged 16 to 24 years has been decreasing since early 2021, with those aged 50 to 64 years driving the recent increases in economic inactivity.   

According to the survey, the number of job vacancies in December 2021 to February 2022 rose to a new record of 1,318,000. This is an increase of 105,000 from last quarter, with half of the industry sectors showing record highs. However, the rate of growth in vacancies has continued to slow down. 

Average total pay increase (including bonuses) was 4.8% and growth in regular pay (excluding bonuses) was 3.8% among employees in November 2021 to January 2022, according to the ONS. In real terms, with figures adjusted for inflation, growth in total pay was 0.1% and regular pay fell on the year at negative 1.0%; strong bonus payments over the past 6 months have kept recent real total pay growth positive. Previous months’ strong growth rates were affected upwards by base and compositional effects. These initial temporary factors have worked their way out. However, ONS is now comparing the latest period with a period where certain sectors had increasing numbers of employees on furlough because of the winter 2020 to 2021 lockdown, so a small amount of base effect will be present for these sectors. This will not be to the degree we saw when comparing periods at the start of the coronavirus pandemic. 

 

Challenging period ahead 

Neil Carberry, Chief Executive of the Recruitment & Employment Confederation made comment: “Businesses across the country are doing what they can on pay, both for existing staff and to help them hire in a jobs market experiencing a severe labour shortage. But rising inflation both makes that effort hard, and reduces the gains workers feel from pay rises. In real terms, average pay has fallen compared to last year. Now is not the right time to be increasing taxes on work for both companies and workers. Ahead of the spring statement, we’re urging the Chancellor to delay the upcoming rise in National Insurance – the UK’s biggest business tax, as well as an additional income tax for workers. 

“A key way to reduce the pressure on our economy and keep inflation down will be to focus on ensuring employment rates and hours worked recover to pre-pandemic levels. Inactivity is still rising, so firms and government need to work together to address this. Recruiters have a key role to play here, from helping government with activation schemes to supporting employers with new forms of job offer to tempt people back into work.” 

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50% of workers take off work to avoid putting on a ‘brave face’

According to new research conducted by Lime Global, a provider of affordable and accessible workforce health solutions, ‘pleasanteeism’, the pressure to put on a brave face – is on the rise across the UK, with three quarters (75%) of workers surveyed admitting to feeling like they have to put on a brave face in front of their colleagues, regardless of how they’re really feeling.

This new phenomenon is having a significant impact on productivity according to the research, with more workers masking how they really feel than ever before. Findings revealed that over half (54%) of employees have taken time off work due to feeling like they have to put on a brave face.

In fact, on average, workers take 2.75 days off per year because of this brave face culture. Across the entire UK workforce, this could add up to as many as 67 million days lost each year due to pleasanteeism alone.

If left unaddressed, this could become a catastrophic problem, affecting absenteeism levels across businesses that are already struggling amid the pandemic, and staff shortages caused by Brexit and the rapid spread of Omicron.

Not only is this driving up absence rates, but workers also revealed that having to put on a brave face at work impacts their ability to do their job effectively, with a third (33%) of those who feel like they have had to put on a brave face admitting that they have been unable to concentrate at work or had an unproductive day.

Non-managerial staff bearing the brunt 

Non-managerial staff appear to be bearing the brunt of the phenomenon. When it comes to opening up about their problems, these workers are more likely to suffer in silence than managerial staff, with 30% not wanting to make a fuss about what they’re going through compared to 25% of managerial staff, while 28% also don’t feel comfortable talking about their problems at work in comparison to 24% of managers, while 23% worry that people would talk behind their back, in comparison to 15% of managerial workers.

Top concerns for non-managerial staff include worrying behind the scenes about money and the cost of living, which impacts 36% of non-managerial staff in comparison to 21% of managerial staff. The research also found that 29% of non-managerial staff admit to being stressed at work, in comparison to 24% of their managerial colleagues.

Shaun Williams, CEO & Founder, Lime Global Ltd, commented: “After two years of stress and anxiety caused by the pandemic, concerns over health and wellbeing are understandably on the rise. It’s therefore vital that businesses and HR managers act to offer each one of their employees as much support as possible. Not only is it the right thing to do, but amid a backdrop of economic uncertainty, low productivity, and staff shortages, it will be crucial to help drive down absenteeism and protect businesses’ bottom lines.

“Providing access to inclusive healthcare benefits – that are designed to make a tangible impact – combined with a company culture that supports health and wellbeing, are key steps that HR managers should take to produce a happier, healthier and more productive workforce.”

Many workers also said they would welcome small initiatives from their employer including mental health days off (24%), and greater flexibility in working hours (22%). While 23% said they would like their employer to be more mindful of their workload and work/life balance.

Gethin Nadin, Director of Employee Wellbeing at Benefex, also commented: “There is clearly a desperate need for us all to create cultures at work whereby sharing your vulnerability and discussing whatever challenges you may be facing is not seen as a weakness. Employees should not feel like taking time off is the only way to deal with increased stress. This work will now be a vital determining factor for the workforces that retain engaged, happy and productive employees.”

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These are the most extreme market conditions in living memory

According to Core-Asset Consulting’s “Industry Trends and Salary Guide” there is an enormous shortfall of candidates in Scotland with pressure to significantly increase salaries and perks making grim reading for financial services sector businesses.

Factors causing huge employment gaps in certain sectors are, according to the report, an exodus of international staff due to Brexit, COVID-related career changing and the climate crisis. These have left the industry at an “uncertain crossroads”.

Now in its seventh year, Core-Asset Consulting’s salary guide, a forensic review of salary levels is also a gauge of market sentiment, activity and the themes that are impacting financial services across Scotland.

The guide reports that despite some of the most extreme market conditions in living memory, the Financial Services Asset Management Services industries have remained broadly resilient, with roles such as Business Analysts, Solutions Architects and Regulatory Risk in the highest demand.

However, with vacancies up 52% and applicants down 5% on the previous 12 months, this year’s report has highlighted a burgeoning staffing crisis across multiple sectors caused by the perfect storm of Brexit, increased remote working, the cutting of intern and trainee programmes, and the reluctance of many to relocate for work.

The report found that candidates actively applying for roles was down 35%, while conversely recruiters are having to up the ante to source 57% more candidates than in 2020.

Betsy Williamson, the founder and MD of Core-Asset, said that the latest edition of the annual report, which is eagerly anticipated across the sector, makes alarming reading for its audience.

She commented: “With a predecessor as turbulent as 2020, it was clear that 2021 was going to be another year of unpredictable change within financial services, and the sector is now at an uncertain crossroads with huge hurdles to overcome.

“The reduction in available labour is connected with the UK’s exit from the European Union and the exodus of overseas nationals returning to native soil – with more than 200,000 EU citizens leaving the UK during 2020.”

“Additionally, thousands of workers placed on furlough at the height of the pandemic have since switched careers, leaving massive employment gaps in certain industries, while rising demand across sectors like Fintech and Environmental and Social Governance (ESG) has been driving salaries to unprecedented levels.”

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Starting salaries for permanent candidates rise 

KPMG and the REC’s latest UK Report on Jobs was compiled by IHS Markit and was based on responses to questionnaires completed by approximately 400 UK recruitment and employment consultancies.  

Due to a sharp rise in economic activity in the last few months, along with a solid demand for staff, a considerable increase in permanent placements took place, while the number of temporary placements also rose.  

The report revealed a decrease in candidate availability, which isn’t new news considering skills shortages. The reduction in candidates, according to the report, meant there was a dramatic increase in starting salaries for permanent staff and a large increase in salary for short-term positions.  

 Availability of workers falls  

The availability of candidates dropped to a record low this month and, according to the report, underlying data revealed that unprecedented falls in permanent candidate numbers and temp staff supply had driven the latest deterioration in overall availability. The declines were widely associated with a reluctance among employees to switch roles due to the pandemic, fewer EU workers, furloughed staff and skill shortages. 

The combination of Brexit and COVID-19 and the resultant skills shortages have led to increased competition for staff amid the dwindling labour supply. This placed upward on starting salaries. A notable finding in the report stated that salaries for newly placed permanent staff increased at the fastest rate seen in almost 24 years.  

Increased competition for staff amid shrinking labour supply placed further upward pressure on starting pay. Notably, salaries for newly-placed permanent staff increased at the fastest rate seen in nearly 24 years of data collection, while temp wage inflation was the second-quickest on record. 

Regional and sector changes  

All four regions monitored in England, recorded faster rises in permanent placements when compared to the latest survey period. The increase was led by London. Unprecedented upturns were also seen in the North and South of England. London registered the fastest rise in temp billings during August.  

The private sector continued to record much stronger increases in vacancies than the public sector halfway through the third quarter. The steepest increase in demand was signaled for permanent staff in the private sector.  

Claire Warnes, Head of Education, Skills and Productivity at KPMG UK, commented on the survey results:  

“Candidate shortages continue to plague businesses, who are all recruiting from the same pool of talent and struggling to fill gaps. While record high permanent placements and higher starting salaries mean it remains a job seekers market, recruiters and employers have seen the most severe decline of candidate availability in the survey’s history and will be thinking about how to attract and retain new staff.  

“This crisis isn’t going away, and the winding down of the furlough scheme at the end of September – while potentially bringing more job hunters to the market – could also add fuel to the labour shortage fire. Many businesses will have changed their business model during the pandemic, and so significant numbers of staff returning from furlough may need reskilling to rejoin the workforce in the same or another sector. 

Neil Carberry, Chief Executive of the REC also commented: “Recruiters are working around the clock, placing more people into work than ever as these figures show. Switching the entire economy on over the summer has created a unique demand spike, and a short-term crisis. 

“But it would be a mistake for businesses to think of this as only a short-term issue. A number of factors mean that the UK labour market will remain tight for several years to come. Business leaders should be looking now at how they will build their future workforces, in partnership with recruiters, including the skills and career path development.”

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Almost half of British business leaders fear losing the UK’s best talent abroad as talent shortages create challenges for employers and recruiters alike around the world.

Workplace change management specialist MovePlan partnered with global headhunter Hanson on a new Future of the Workplace survey of 1,191 business leaders and their employees. It found that 40% of business leaders are concerned that a combination of Brexit and post-pandemic talent challenges will make it harder to find and keep their talent; and 29% of those at mid- and junior-level felt pessimistic about the UK’s chances to compete for the best talent and attract global businesses post Brexit.

Talent shortages are making it more difficult for recruiters to meet client demands. The latest quarterly Global Talent Recruitment and Staffing Industry Report from JobAdder analysed data trends across its agency users in the UK, Australia, New Zealand, the US and Canada. It found that the average time to make a contract placement was 12.3 days in Q2 of 2021, while placing permanent staff took an average of 33.7 days during the same period.

Rob Earles, Head of Agency Sales at JobAdder recently observed that, while the UK is having to address skills gaps that were waiting in the wings before the pandemic, border closures and increased demand for talent has brought the issue of lack of qualified talent to the fore.

“Against this backdrop, agency recruiters must respond by keeping close to clients so that quality job orders can be secured,” said Earles. “They should also direct resources into and look to build more efficient, empathetic candidate communications processes, focusing on developing their internal skill sets. This approach is the only way to stay nimble in the face of an evolving hiring landscape that will be with us for some time to come”.

The UK’s post-Brexit immigration policies and drastic changes to the skilled worker visa programme are making it more difficult to access talent in UK and from abroad.

“I struggle to see how the UK will cope with the worst staffing shortages since 1997 when employers will be forced to hire in person due to Home Office right to work check rules,” said Keith Rosser, Reed’s Director Group Risk and Chair of the Better Hiring Institute, who hosted an online event with over 50 major employers on 12th August to champion the extension of digital right to work checks.

The Home Office announced in June that employers could continue to verify right to work in video calls with job applicants and existing workers, and accept scanned documents or a photo of documents. This was extended until 31st August but the Home Office has since announced that penalties of up to £20,000 will be imposed for anyone avoiding manual checks from 1stSeptember.

“My concern is that our industry may not be seeing what’s coming – a candidate led market,” said Josh Rayner, CEO of estate agency recruiter Rayner Personnel. “This is further illustrated by the number of available workers plunged in June to the lowest levels since 1997, job vacancies in the three months to June rose by 241,000 to 862,000 – the biggest quarterly increase since records began in 2001 – and 1.3 million non-UK workers have left the country due to the pandemic.”

Photo courtesy of Canva.com

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Danny Brooks, CEO of VHR

With just six months to go until the UK leaves the European Union, and no deal yet in place, 61% of employers are worried about leaving the EU. How will Brexit affect UK recruitment?

How will Brexit affect hiring candidates?

Although 25% of UK businesses currently employ staff from the EU, an August 2018 survey reveals that over 50% UK business leaders would be put off employing someone from the EU after Brexit changes the UK’s immigration laws.

Recruiting EU nationals currently working in the UK – In July the Home Office published the new mandatory registration scheme for EU nationals. After Brexit occurs on 29th March 2019, all 3.8 million EU nationals living in the UK and EU nationals wanting to enter the UK will need to register for ‘settled status’ to continue to work and live in the UK. Settled status, with its supporting technology still in the testing phase, aims to protect the rights and jobs of EU nationals currently working in the UK, but what about recruiting EU nationals after Brexit?

Recruiting EU nationals after Brexit – From 1st July 2021, EU citizens and any family members living with them must hold or have applied for UK immigration status to legally work in the UK. This new status could present a challenge for hiring managers and recruiters, who may have to adapt candidate selection processes to comply with new editions of immigration law in the next three years. The new status will require UK businesses to adopt a longer-term talent attraction strategy that either focuses on existing UK-based talent pools or accommodates the required time and resources to bring EU nationals to work in the UK for the first time.

Increased skills shortages – The effects of Brexit could be further exacerbated by existing UK skills shortages across industries. In Q4 2017, 22% of UK engineering business leaders and 42% of UK aviation industry leaders identified a labour shortage as the most urgent challenge they will face in the next five years. Global demand for aviation skills alone is set to overtake supply by 2027, and with skilled candidates already under-represented amongst a rapidly reducing workforce, skills shortages will become an increasingly dominant UK business issue.

Increased need for marketing and talent attraction – In May 2018, LinkedIn reported that 96% of hiring strategies had already been impacted by Brexit. The same study found that 44% of recruiters believe that working in the UK is becoming a less attractive prospect to EU citizens, with 39% seeing international candidates who are reluctant to move to London.

How can we mitigate against the effects of Brexit on recruitment?

Retain existing workforces – To protect against the possibility of losing employees who are EU citizens, business leaders can ensure employees are aware of their eligibility to apply for British citizenship or settled status before Britain leaves the EU and communicate the specific details and urgency of registering for settled status.

Build UK-based skills from wider talent pools – As 67% of UK graduates say that they now work in a role completely unrelated to their degree and 1 in 3 graduates are unhappy in their current job, fewer young people than ever are getting into apprenticeships and joining industries such as manufacturing, engineering, aerospace and automotive. VHR’s divisional director and aviation recruitment specialist, Ryan Abbot, advises on the UK skills shortage, “In a globally connected world where students are bombarded with choices, we need to shout louder to reach potential talent who are unaware of what our industries can offer. Business leaders and recruiters can partner with colleges and schools to directly engage with students and show them the variety of successful careers open to them across UK industries.”

Outsource from non-EU countries – The world is rich with talent just waiting to be found. Depending on local labour laws and specific remits, business leaders could turn their recruitment strategies towards candidates based outside the EU and secure the expat workers needed for business growth and success. VHR ethically recruits skilled and experienced candidates across 45 countries and four continents – find out more.

Picture courtesy of Pixabay

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