Tag: Skill shortages

Demand for IT professionals up 76% year-on-year in July 2021

Data preceding the pandemic highlights the true extent of skills shortages in the UK with applications to jobs down 47% between July 2019 and July 2020. According to real-time data from the global network of job boards, Broadbean Technology, the decline in applications, largely attributed to the pandemic, suggests that the UK was already experiencing talent shortfalls before lockdown.

Sectors worst hit

In the engineering, accounting and financial services industries, the demand for talent increased by over 100% in the year to July 2021. However, when compared to two years ago, Broadbean’s data suggests that talent shortages are worsening.

Broadbean’s data shows that engineering vacancy numbers doubled (up 103%) between July 2020 and July 2021. However, when compared to the latest data with July 2019, vacancies were down by 20%, with the number of applications decreasing by 54%.

The financial services sector also saw vacancies double (104%) between July 2020 and July 2021. But for July 2019 to July 2020, vacancies dropped 12%, and application numbers declined 57%.

In the accounting industry, vacancies were up by 104% between July 2020 and July 2021, but were down 31% when compared to 2019 figures, while application numbers from 2019 – 2021 also fell 56%.

Demand for IT professionals still rising

The fast shift to online working environments in the last year resulted in an annual increase of 76% in vacancies in the IT industry. The digital transformation of workforces continues to drive demand for this talent in this sector.

As Alex Fourlis, Managing Director at Broadbean Technology explained: “While there are ongoing reports of a post-Covid talent shortage, as the so called ‘Great Resignation’ impacts headcount and increases competition for talent, our data shows that the skills shortage was already well underway before the virus struck. Covid may have pushed the severe skills shortages the UK is facing into the public consciousness, but trouble was already bubbling under the surface in the early months of last year.

“This can, in part, be linked to the impact of Brexit on talent pools and the need for an appropriate visa route for independent professionals to encourage people from outside the UK to work in the country.”

Pre-Covid skills shortage

Olly Newton, Executive Director, The Edge Foundation said: “Figures from the Government’s own Employer Skills Survey showed 226,000 vacancies created by skills shortages in 2017, up from just 91,000 in 2011. These are jobs that remained unfilled because the right skills couldn’t be found – an economic and social tragedy.

“It has cost employers dearly – £4.4 billion has been paid out in the past year on recruitment fees, higher salaries and temporary staff. It has also cost young people dearly – young people who should have been given the skills they needed to get into and thrive in those jobs.

“Research from before COVID showed that these shortages were widening not shrinking. Research by the Open University publicised by the Edge Foundation shows that nine out of ten organisations (88%) report a shortage of employees with digital skills. Meanwhile, looking to the future, work by the Government’s own Industrial Strategy Council suggested that by 2030, 7 million workers could be under-skilled for the requirements of their changing jobs.”

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Relief for employers & recruiters already struggling with skills shortages

The Home Office has announced an extension of the temporary adjustments which allow right to work (RTW) checks to be completed with copies of documents via video conference due to pandemic restrictions.

The announcement to extend is a welcome relief for employers already struggling with skill shortages. In-person RTW checks were set to begin again in September with fines of up to £20,000 for those not complying. Companies have been gearing up for the change, however, the temporary RTW checks solution will now continue to 5 April 2022 and employers are still allowed to carry out the adjusted checks using a scanned copy or a photo of the worker’s original documents via email or mobile phone.

The Association of Professional Staffing Companies (APSCo) has welcomed the delay to in-person right to work checks.

Tania Bowers, Legal Counsel and Head of Public Policy at APSCo commented: “While we look forward to seeing the results of its longer-term review, we hope that the success of the digital processes over the last 18 months leads to a more appropriate and modern method of managing Right to Work checks.

“Research from the Better Hiring Institute – which Chair of the APSCo Compliance+ Committee, Keith Rosser, is a director of – shows that at least 40,000 workers were successfully hired during the pandemic via temporary adjusted checks. This highlights that the digital Right to Work checks have been working. And with the UK facing a skills shortage at a time when the Office for National Statistics has reported a record number of job vacancies, ensuring employment regulation is fit for purpose in the modern world of work and doesn’t put UK employers on the back foot, is crucial.”

Keith Rosser, Director Group Risk and Director of Reed Screening at REED, has championed the move to extend the digital RTW checks. He said: “Digital right to work checks have been critical for helping the Levelling Up agenda, driving Build Back Better, and helping with the current UK staffing crisis.”

 

Permanent solution

Screening expert Sterling  has called on the Home Office to use RTW extension to drive meaningful change. Steve Smith, Managing Director EMEA, Sterling, commented: “This digital move delivered a number of other positive results, streamlining checks for some and expanding the reach of recruitment activity as a worker’s location became less important – a critical element in a skills short market.”

The Home Office also confirmed that they’re reviewing the availability of specialist technology to support a system of digital RTW checks for the future to introduce a sustainable digital solution which will include many who are unable to use the existing online checking service. This would enable checks to continue to be conducted remotely but with enhanced security.

Jason Medcalf, Sales Director at People Group, which specialises in pre-employment background-screening, added:

“Most recruiters feel that a return to manual checking of RTW, now or in the future, would needlessly apply the handbrake to the excellent work recruiters are doing to fuel the economic recovery of UK Inc. The sector is simultaneously facing the widest and most pronounced candidate shortages in years, plus a fundamental change in where, when and how recruiters perform their work.

“Research and business cases have shown that using the available technology as a precursor to human review delivers benefits ranging from filtering out fake and stolen documents that would pass a human-only review to halving the total length of time taken to validate an applicant and place them sooner – creating additional margin for recruiters, delighting end hirers, and mitigating the skills shortage.

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Businesses looking to engage tech contractors may need to rethink their pay rates and conditions, according to new research by Hays Technology.

A survey carried out by the specialist IT recruitment agency in May polled more than 600 contractors and hirers and was used to put together its UK Contractor Day Rate Guide 2021.

The research revealed that demand for technology expertise is increasing, but that skills shortages are hindering many firms’ efforts to hire talent. It reported a 21% increase in demand for IT contractors and a 17% increase in placements from H1 to H2.

Of the organisations polled, 42% said they did not have the required talent to achieve their current business objectives and more than 8 in 10 reported they had found it difficult to recruit contractors over the last year.

This supply and demand mismatch has led to day rate increases for many contractors, with some  project and change managers achieving increases of more than 10%. Overall, data gathered by Hays offices across the UK showed that technology day rates had increased by 0.8% over the last 12 months. Software developers had seen an average day rate rise of 2.4%.

James Hallahan, Director of Hays Technology in UK & Ireland, said: “Skills shortages abound in the technology sector and there are plentiful opportunities for tech contractors to be deployed within organisations that can’t find enough permanent employees with the right skills. Contractors with the most sought-after technical and soft skills, and those with a proven track record for successfully managing projects and leading change are going to expect assignments that deliver on flexibility and terms.”

Beyond pay

However, the Hays research also found that contractors wanted more than just pay increases: the majority now also wanted to be able to work remotely.

Many were already working from home for some of the time and more than half said their work-life balance had improved since March 2020, with almost three-quarters reporting that being able to work remotely was important to them.

Almost half (46%) now want greater flexibility with regard to hours and two in 10 said they wanted to change the expectation for them to work outside of their contracted hours to enhance their work-life balance.

The thorny issue of the IR35 reforms that were introduced in April remains a sticking point between contractors and hirers, found Hays.

“Most contractors want to stay outside of PAYE, presenting a potential shortage for organisations seeking to secure their skills. So, while the increase in activity means there is great demand for tech contractors, organisations are having a difficult time engaging with them. They may need to take an assignment-by-assignment view in order to attract the right skills and work with a recruitment specialist to help them secure the best talent,” said Hallahan.

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