Tag: Brexit

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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