Tag: skills shortages

More than a third of job seekers drop out of recruitment procedure

According to research published by Sterling, the majority (78%) of job seekers are dropping out or considering dropping out of the recruitment procedure due to lengthy and complex processes, exacerbating the skills crisis.

The data, which comes from a global survey of more than 1,200 HR professionals and perspectives from more than 3,700 recent job seekers, revealed that a third of those that dropped out said the hiring process was too complicated and 22% expressed an issue with the background screening process.

There is clearly a disconnect between employers and candidates as the research found that just 9% of HR professionals believed that candidates would find their hiring process complicated, despite a third of candidates exiting the process for this very reason.

According to Sterling, these results should be cause for concern at a time when skills are in increasingly short supply, with almost half of HR professionals surveyed revealing that they are unable to find enough candidates to fill roles.

Steve Smith, President International at Sterling, commented: “With skills in short supply across most of Europe, ensuring applicants have the best possible experience with a brand is of significant importance. However, this latest data indicates that a significant proportion of the candidate community is dropping out of hiring processes due to the complexity of requirements, suggesting the experience for the end-user isn’t as positive as it could be. There’s been a wealth of speculation that individuals are getting counter-offers which is leading to them dropping out of the hiring process due to opportunities elsewhere. While this may be the case, the insight from applicants themselves suggests there’s more to this issue that needs to be addressed swiftly. In the current economy, it’s simply not a viable option to overlook how important it is to provide an efficient and engaging hiring process for candidates.”

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More concern around skills hiring than the recession

Despite concerns about the recession, most tech leaders are planning their recruitment around market growth, says new research from Talent Works. The research revealed that leaders are more concerned about skills hiring than a recession and that hiring, especially in the tech industry, is aligned to market growth.

Talent Works’ latest study, gauging attitudes towards hiring in an uncertain economic landscape, revealed that despite the chance of a recession, over 61% of the 500 US and 200 UK tech leaders surveyed said they are still planning their recruitment drives around the market growth they are seeing.

The findings of this research align with the most recent information from The Office for National Statistics, which reported that the number of job openings in the UK from April to June was 1,294,000. This is an increase from the previous quarter. These numbers are still higher than pre-pandemic levels, indicating that worker demand remains robust.

The research also showed that tech leaders are still experiencing challenges with finding the right talent. Forty-eight percent said they are concerned about a skills shortage and getting the talent and specific skill sets they need to grow their businesses. A further 37% of tech leaders believe that flexibility in hiring models is a top priority.

Jody Robie, Senior Vice President for Talent Works, commented: “We’re still seeing high levels of demand for roles across every sector, including technology,”

“However, businesses need to find the right people within their budget to meet their growth predictions. We’re also seeing more businesses opt for flexible and embedded recruitment outsource (RPO) models as a way of extending their in-house talent teams. Beyond just getting resumes and hiring fees, this model allows them to understand the market and provides insight into the perception of their employer brand. It’s helping them to focus on growth, not recruiting, and it makes economic sense to establish a flexible sourcing relationship during a time when businesses need agility now more than ever before.”

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The rise in job ads speaks to increased strength in the labour market

According to data from ANZ Bank, job advertisements in Australia rose by 18.4% in June 2022 on a seasonally adjusted basis when compared to the same period in June 2021. This pattern of online job postings is being seen across the globe as skills shortages continue.

On a monthly basis, job ads increased 1.4% in June following a small upward revision of the May number. The total number of job ads in June exceeded the recent peak in March signalling continued strength in the labour market.

When compared to January 2020, job ads were up 58.9% while the number of job ads totalled 243,523 in June 2022.

Catherine Birch, ANZ Senior Economist commented: “Growth in demand for labour is still outpacing supply but the sheer volume of unmet labour demand suggests underutilisation will keep falling and stay low even as demand growth is curtailed by higher inflation and rising interest rates. The very tight labour market is a key reason why we expect the Australian economy will be resilient in the face of these.”

The Bank’s job ads data is based on information provided by the operators of Seek.com.au and the Department of Education, Skills and Employment’s Australian JobSearch site (Jobsearch.gov.au).

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Skills shortage remains a concern in the market

According to background screening and identity services firm, Sterling, candidate communication needs to move up the priority list as the war for talent rages on.

With the latest labour market data from the Office for National Statistics (ONS),revealing a continued increase in vacancy numbers across the UK and concerns around talent shortages rife, the expert Sterling called on employers and HR teams to prioritise high quality and regular candidate communication.

In a recent Sterling Live discussion, experts discussed how the war for talent can often be won through simply communicating to candidates consistently, from the first engagement right through their first days on the job.

Tom Stokes, Director at Sterling EMEA, explained: “The skills shortage has been a concern for some time now and while there is certainly a need to broaden talent pools, far too often, potential new recruits are exiting hiring processes, due to the process itself. When we consider how tough it is to recruit at the moment, once an offer has been accepted it’s understandable that some hiring teams or managers may breathe a sigh of relief. However, candidates are increasingly disappearing in that crucial timeframe between the offer and the first day, and this is quite often due to a lack of communication.

“Employers need to remember that for an individual, a career move is a life changing event and after the excitement of getting the job offer, they can face a lengthy notice period where they are juggling their current role alongside the administration that comes with a new job, including employment screening checks.

“Communication is key during this time. Candidates need to know what to expect after the job offer is made, otherwise, they can feel lost or alienated, which leaves them open to being lured away by other businesses. Starting a new job and going through an employment screening process can be daunting for anyone. Celebrate your new hire and maintain the excitement of the job offer. The more they are communicated with and the more engaged they feel, the lower the chances of them being enticed elsewhere.”

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REC says employers need to rethink hiring processes to mitigate skills shortages 

According to a survey conducted by the REC’s JobsOutlook, business confidence in the UK economy fell by 9%.  

This is the first time since February/ April 2021 that the barometer has fallen into the negative, indicating that confidence in the economy is waning. Uncertainty around rising inflation, labour shortages and the Omicron variant has increased over the past three months and this appears to the be the reason for the drop.  

Business confidence in making hiring and investment decisions continued to improve with a higher proportion of firms saying their prospects were still improving. However, that growth in confidence weakened slightly, falling by two percentage points to net: +11.  

According to the survey, growing uncertainty has led to an increase in demand for temporary workers increasing to net: +15 for the next three months; with demand for the next 4 to 12 months also rising by nine points to net to +14. 

Hiring intentions for permanent staff remained robust at net: +21, both in the short term and in the medium term. 

The survey also reported that in November, shortly after the end of the furlough scheme, 51% of employers had seen no change in the availability of candidates for vacancies.  

Kate Shoesmith, Deputy CEO of the REC, commented: “While the next few weeks are likely to be bumpy, we anticipate a highly competitive labour market in early 2022. There will be particularly high demand for temporary work, which helps businesses to manage uncertainty and keep people in work during tough times. Firms will have to look seriously at their recruitment process and their offer to candidates to attract the staff they need. Recruiters are ideally positioned to help with this.” 

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Reskilling workforce key to plugging skills shortage hole

The newest McKinsey Global Survey on reskilling has highlighted the urgency needed to address massive skills gaps across all industries. The accelerated move towards digitization and remote work has placed new demands on employees who now require different skills to support significant changes to the way they work and to the business priorities their companies are setting.

Most of the survey respondents said that skill building (more than hiring, contracting, or redeploying employees) is the best way to close skills gaps and that they have accelerated their efforts to reskill or upskill employees since the start of the pandemic. The results also pointed towards a shift in the most important skills to develop, which leaned towards being social and emotional in nature, for example, empathy, leadership, and adaptability.

The survey suggested that the need to address skill gaps is imperative with most respondents (58%) saying that closing skill gaps in their companies’ workforces has become a higher priority since the pandemic began. And of five key actions to close these gaps – hiring, contracting, redeploying, releasing, and building skills within the current workforce – skill building is more prevalent now than it was in the months preceding the pandemic. Sixty-nine percent of respondents said that their organizations do more skill building now than they did before the COVID-19 crisis.

The redeploying of talent to new roles often requires some degree of skill building and has become more commonplace over the past year with 46% of respondents reporting an increase in redeploying talent within their organizations.

Additionally, the results of the survey suggested that this commitment to skill building represents more than a one-time investment. More than half of respondents said that their companies plan to increase their spending on learning and skill building over the next year, compared with their investments since the end of 2019.

 

 

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Recruiters report difficulty in sourcing candidates

A survey conducted by the Recruitment & Employment Confederation (REC) reported that nine in ten recruiters (88%) say that labour shortages are one of their biggest concerns for the remainder of 2021, while skills shortages are a major concern for two in three (65%).

With shortages hitting every sector of the economy and many staffing companies reporting the tightest labour market they’ve ever experienced, the REC is calling on business and the government to take urgent action to solve the problem.

Recruiters have a significantly higher number of roles to fill than before the pandemic, with three in five (58%) having at least 30% more vacancies than pre-pandemic. Of the 191 recruiters surveyed, almost all (97%) said that it was taking longer than usual to fill those vacancies, compounding the problem. Half (50%) reported that it now takes more than a month to find suitable candidates.

Recruiters reported several factors were affecting their ability to source candidates. The top reason was skills shortages (cited by 65% of respondents), followed by the new immigration rules (57%) and their clients not being able to offer competitive salaries (53%).

In response, the REC has set out a number of asks for both government and business to help solve this crisis:

  • Set up a cross-government forum including the Business, Education and Work and Pensions departments, as well as business organisations. This would restore the importance of workforce planning in the economic debate between business, government and other stakeholders, not only focusing on skills.
  • Broaden the apprenticeship levy and increase funding for training at lower skill levels. This would improve progression and transition opportunities for lower-skilled and temporary workers who need them most, and encourage business to do more here in the UK, not less.
  • Allow flexibility in the point-based immigration system and a visa route for lower-skilled workers, which would allow firms in the worst-affected sectors like logistics to access staff at times of pressing need.
  • Increased focus from businesses on workforce planning, staff engagement, attraction and retention policies. Firms need to raise workforce planning up to the senior leadership level, and work with key professional partners like recruiters to boost performance, productivity and staff wellbeing.

This also follows recent research from British Future, which found increasingly positive public attitudes towards immigration. Two thirds of the public (65%) agree that employers should be allowed to recruit from overseas for roles in shortage – showing that a more flexible immigration system would be popular as well as helping businesses to fill crucial vacancies.

Kate Shoesmith, Deputy CEO of the REC, said:

“Worker shortages are a huge problem for employers and their recruitment partners, across all industries and regions. Vacancy numbers are far higher than pre-pandemic, and it is taking much longer to fill them. This is putting the recovery at risk by putting capacity constraints on the economy, as last week’s GDP figures showed. In our survey, recruiters also highlighted a wide range of factors that have combined to cause these shortages – this is a complex problem with no one easy fix.

“As such, we will only solve these shortages through a collaborative approach. We’re glad that multiple government departments are coming together in a joint forum to tackle the issue, but to be effective it must also include business and industry experts. Government must allow more flexibility in the immigration system so firms can hire essential workers like drivers from abroad, and also improve training opportunities for lower-paid and temporary workers. Meanwhile companies need to focus on how they will attract and retain staff through improved conditions and facilities, not just pay.”

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Job vacancies rise to over one million to set new record

New data from the Office for National Statistics (ONS) shows that employment has returned to pre-pandemic levels, with August payrolls showing a monthly increase of 241,000 to 29.1 million. The number of job vacancies in the three months to August has also risen above one million for the first time since records began in 2001.

Speaking to the BBC, ONS deputy statistician Jonathan Athow, warned that well over a million are still on furlough and the recovery is not even, with London still down, young workers disproportionately affected, and sectors like hospitality slower to recover. The biggest rise in job vacancies was in the food and accommodation sectors, up by 57,600 in August.

While the overall unemployment rate fell from 4.7% to 4.6% in the three months to July, this is against the backdrop of acute talent shortages. Various trade bodies, including the British Chambers of Commerce, blamed Brexit and Covid for declines in labour supply and warned that ‘the end of furlough is unlikely to be a silver bullet to the ongoing shortages’.

Neil Carberry, chief executive of the Recruitment and Employment Confederation said: “The Government has convened a cross-department forum to tackle these shortages, but this will only be effective if industry experts are involved as well. Government must work with business to improve training opportunities for workers to transition into the most crucial sectors and allow some flexibility in the immigration system at this time of need. And while businesses are raising salaries in many sectors, they must think more broadly about how they will attract and retain staff through improved conditions, facilities, and staff engagement, working with recruiters, who are the professional experts in all of this.”

Tania Bowers, Legal Counsel and Head of Public Policy at APSCo, added: “The fact that pay has returned to pre-pandemic levels at last is a positive sign for the economy, however, we are seeing employers simply needing to increase remuneration as staff shortages continue to impact hiring activity. The increasing dearth of talent that businesses across the country are reporting is a real concern to the recruitment sector.”

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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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