Tag: Pandemic

Talent shortages reported across all industries  

Research by Right Management, global career experts have revealed that four in five employers admitted to hiring new recruits who would be better suited to a different role in the business than they were originally hired for, with 16% going as far as to admit that most employees would be better suited in an alternative role. 

The trend appeared to be more prevalent in London with 82% admitting ‘at least some’ would be better suited elsewhere whilst a shocking 21% deemed ‘most’ new hires to be in unsuitable roles.  

It’s come to light in the current market that the pandemic has afforded employees the time and space to reflect on their working lives, and to consider whether their current employer is aligned with their goals and values – something that many have never had the luxury of doing before. This new perspective led to many employees leaving their jobs, triggering the apparent ‘Great Resignation’. Naturally this exacerbated challenges for organisations that are already struggling to hire because of a reduced talent pool – a result of Brexit, an ageing workforce and inactive workers. 

Large businesses with more roles to fill reported having more employees in unsuitable roles, (81% at least some, 17% most). 

Talent shortages are reported across all industries, and this comes as COVID-19 restrictions are lifting and the UK enters recovery mode, with the number of roles advertised at an all-time high. 

The research reported that employees leaving a role are more likely to take another within the organisation, if possible (26%), with 22% leave to join a competitor business. 

Tim Gilbert, Right Management’s UK Managing Director, commented:“There are a number of factors which could cause people to be hired into the wrong role. Businesses are often under immense pressure to deliver, and this pressure can lead to a rushed hiring process, as leaders look to avoid burnout among current staff. 

“The reduced pool of talent available could lead to a ‘softening’ of the recruitment process. The hiring process itself may not reflect the changes that the UK labour market has experienced; for example, businesses could look to prioritise soft skills and the right cultural fit rather than focusing solely on specific technical skills and experience.” 

He continued: “Recruiting poorly can be very damaging for a business and draining on often-stretched resources, not to mention for the morale and confidence of the colleague in question. It is also very costly – the wrong hire can cost three times the first year’s salary.” 

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Concerns over cost of living more worrying than the pandemic   

In his Spring Statement, Rishi Sunak rightfully mentioned that talent is the backbone of the economy, and while it was disappointing to hear that National Insurance Contribution increases will go ahead, the 1% reduction in the lowest rate of income tax was a positive boost for millions of workers. The Chancellor has also set out plans to cut the basic rate of income tax from 20p to 19p from 2024, the first cut to the basic rate in 16 years.    

It is clear that the Government is aware of the strain the population is under with rising cost of living, but is it doing enough?  

According to survey from CV-Library, the Government’s Spring Statement has fallen short for UK professionals with the majority of the 4,000 respondents already in disagreement with Sunak. He stated that the UK labour market is in a strong position to deal with the current global challenges but 60% of respondents do not share his beliefs of optimism.  

The Government’s Spring Statement has fallen short for UK professionals as the latest survey from the UK job board, CV-Library, revealed.   

The vast majority, of the 4,000 respondents were already in disagreement with Sunak, and his statement last week that the UK labour market is in a strong position to deal with the current Global challenges with 69% feeling that the Chancellor is wrong about the job market and do not share his beliefs or optimism.  

On the day inflation hit a 30-year high, 71% of respondents said that concerns over cost of living have superseded worries about the pandemic. The survey revealed which costs UK professionals are most concerned about:  

  1. Energy 60%  
  1. Fuel 20%  
  1. Food 16% 
  1. Travel 4%  

Lee Biggins, Founder and CEO of CV-Library commented:“Our survey proves that rising energy costs are the biggest concern for most people and the Government simply isn’t listening. With UK workers having to wait up to two years for the 1p drop in income tax, the immediacy of the rise in the unemployment allowance is a welcome relief for UK businesses but, overall, there feels like little has been done that will make a significant impact and help drive the change and investment needed for growth.”  

Joanne Frew, Head of employment at DWF, commented on the employment implications of the announcements made by the Chancellor today at the Spring Statement. She said: “Although the Spring Statement will bring much needed relief to many, it is questionable what assistance it gives to those employers who are struggling to recruit and retain the best talent.  With such a competitive market many employers have been struggling with labour supply which inevitably has led to pay increases in certain sectors. Against a backdrop of a relatively robust labour market throughout the pandemic, pay increases are anticipated at 3% for 2022 reflecting a record breaking high according to the CIPD.” 

Ged Mason OBE, Morson Group CEO commented: “The conflict in Ukraine and the cost of living crisis has shone a light on the UK’s need to be more self-sufficient when it comes to energy, and though it wasn’t directly mentioned in the Chancellor’s statement, the government will soon be setting out its energy security plan, which will rubber stamp investment to scale up hydrocarbon, nuclear and renewable energy generation. This is what this country needs today, and we’re well-versed in these core markets to support ongoing skills demands, be it niche and volume labour requirements.  

Ken Brotherston, CEO at TALiNT Partners weighed in: “Whilst, on the face of it, there wasn’t much in the Chancellor’s spring statement for employers or employees, the increasing costs of travel and fuel can potentially be mitigated by optimising flexible working policies. Post-pandemic, more flexible working models are a clear direction of travel anyway, so those employers who are use these effectively can genuinely claim to not just being able to accommodate candidiates’ lifestyle preferences but save them money as well.” 

 

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Over a year on from the IR35 changes are you compromising your talent acquisition strategy by providing a lack of choice for your flexible workforce? 

It’s now over 12 months since the Off Payroll Working IR35 reforms impacted the private sector.  Now is a good time to reflect on how the market reacted, and over a year on, how businesses are reviewing their approach to their contractor talent base. Let’s have a quick recap of the key change the legislation brought for hirers.   

Since April 2021, contractors can no longer choose their own IR35 status. Instead, the responsibility for determining status, was moved to the hirer.  The hirer needs to decide if the worker is inside or outside IR35 and then inform the supply chain of their decision.  This decision on status is very complex and many hirers have had concerns about getting the decision wrong and the potential implications for them financially and reputationally.   

Looking back it is clear that the vast majority of hirers have responded to the changes by adopting a risk averse position.  Many clients have chosen to simply avoid the question of determining status all together, and instead opted to classify all contractors as inside IR35. The consequence of this significant tax increase for contractors has led in many sectors, to an increase in contractor pay rates as hirers compete for talent.  The shortage of talent during a surge in recruitment post the pandemic has further fuelled pay rate inflation. 

As a consequence, we have seen the vast majority of contractors being forced to change the way they are engaged and stop using their personal service companies (PSC’s).  Instead, a significant number of contractors have been “taken on the books” and offered fixed term or permanent employment contracts by hirers. 

For many HR departments in April 2021, offering contractors full time employment with them directly felt like the lowest risk decision in light of the significant financial and reputational risks of getting IR35 wrong.  Whilst this may have been a quick fix, hirers are now understanding that moving contractors on to fixed term contracts, increases their employment risk rather than engaging them via a contractor management service such as an umbrella company.  Adding contractors to a permanent payroll can also increase complexity as it dramatically increases onboarding and offboarding as well as often complex pension arrangements and obviously the heightened risk of employment claims.  

At a time when the recruitment market is red hot with businesses looking to scale after the pandemic, many of these companies are finding that those contractors are leaving their fixed term contracts to seek contract work again.  For many contractors the reason they chose contracting was because of the variety of work they could take on and the flexibility to choose when and how they wish to work, not to simply reduce their tax bill. 

For hirers, they are also realising that the need for a degree of flexibility in their workforce is key now that many business strategies were ripped up in 2020 and companies are reshaping the size and make up of their workforce to ensure growth or even survival.  Some tech and other businesses now have less than 50% permanent headcount. 

At the start of 2022 we see many hirers, with an inhouse recruitment focus, looking to engage contingent workforce management specialists to ensure they can offer a full range of compliant payroll offerings to attract the right quality and mix of talent.  The right partner can facilitate the IR35 determination process and then provide the full range of payroll options.  They can also offer full indemnities against the risks associated with compliance, including IR35, so a hirer can have the assurance they are mitigating risk and not compromise on talent acquisition. 

So what does a full range of payroll options look like? 

Fixed term contract: this can of course be the most suitable option for some contractors. There is however no need to contract with these workers yourself, and the right workforce management partner should offer to engage these workers directly to remove you from risk and the burden of running payroll which can be complex.  For example, many contractors now expect to be able to pay significant sums into their own nominated pension provider and this significantly increases the payroll burden for businesses. 

Umbrella employment: an umbrella partner, or a preferred supplier list of chosen providers, can help give contractors choice in how they wish to be paid.  Your workforce management provider should be able to help guide you on a suitable process to ensure you pick compliant providers to work with and avoid rogue suppliers who increase your compliance risk. 

PSC’s (inside or outside of IR35): it is perfectly possible to still pay contractors via their limited company.  If you have an appropriate status determination then your workforce management partner should be prepared to be the fee payer and carry the risk.  Even if a contractor is determined as inside IR35, their PSC can still be paid and your partner will deduct the necessary taxes and pay across to HMRC. 

CIS: for those hirers in the construction industry, the Construction Industry Scheme or CIS for short allows any self-employed person to have tax deducted by an appropriate payroll partner and make payments to HMRC on the contractor’s behalf. The remaining tax liability for the year is then settled via the contractor’s self-assessment tax return (SATR). 

Choosing the right workforce management partner can ensure that a hirer provides a full range of choice to a contractor when looking to engage them on business-critical projects.  The right partner should also be prepared to indemnify the client from risk to ensure the business can be assured they are complaint.  IR35 may have disrupted the market, but as the dust settles the most agile hirers will beat their competition by attracting the best contractors to deliver business goals in 2022. 

 

*About giant  

For over 30 years giant has been a specialist in contractor management. Our flexible proprietary software and managed services platform, giant one, can manage contractors through-out their life cycle with you, from candidate attraction, screening and on boarding to timesheet management, billing, employer of record, payroll and payments. In the UK and internationally.  

 Uniquely, the giant one platform is suitable for any organisation with 20+ contractors so you don’t need to worry that your contractor numbers are too small to benefit.  

We take compliance with the complex regulations governing contractors very seriously. To underline our compliance commitment to you, we contractually indemnify you against any tax and employment risk when we manage your contractors.  

And we are independent. Unlike others we do not provide agency recruiting services and we have no affiliated companies that do either. Our neutrality ensures we advise you only, on what’s best for you and your contractors.

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47% of female entrepreneurs took on more family responsibility  

According to research by Simply Business, one of the UK’s largest small business insurance providers, two-thirds of female entrepreneurs feel the pandemic has worsened gender inequality and bias in business.  

The research found that nearly half (47%) of female entrepreneurs had to take on more family responsibilities during the pandemic, with one in ten (11%) saying they’ve put their business plans on hold.  

A third of women business owners experience sexism
Worryingly, the study also revealed that one in three (32%) female entrepreneurs have experienced sexism as a business owner, while one in five (19%) have experienced gender inequity and unequal access to opportunities.  

Over a third (34%) of female entrepreneurs who took part in the study claimed that juggling childcare and family responsibilities is one of the greatest challenges when it came to running their running a business.  

Baroness Karren Brady CBE, ambassador for Simply Business, commented: “The level of gender bias and inequality within business, particularly within the small business landscape, is astounding. Sexism and bias, whether conscious or unconscious, will erode confidence over time and lead to unequal opportunities. It’s vital we challenge sexism and bias, and equip female entrepreneurs with the tools, access and confidence to overcome these obstacles. We need to inspire women into business, not bring them down. 

“We need to harness the talents, ambitions and drive of women, at any business, big or small. I’m proud to partner with Simply Business to shine a light on sexism and bias in business – it’s an ongoing challenge we need to resolve. Supporting and mentoring one female entrepreneur and giving them the skills and tools they need to flourish, is a positive step forward in this journey.”  

Bea Montoya, Chief Operating Officer at Simply Business also commented: “The pandemic has been tough on everyone, with few being hit harder than the nation’s small business owners – and that’s especially true for women who run their own business. 

“From trading restrictions to staff shortages, the challenges of running a small business over the last two years have been relentless. But for those also juggling parenting, childcare and home-schooling, those challenges have been intensified. Almost half of female entrepreneurs have had to take on more family responsibilities during the pandemic, leading to one in 10 putting their business on hold entirely.” 

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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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In-demand roles reflect the changing views of jobseekers 

According to the latest research from Adzuna, pet sitting is the most sought-after job in the UK, with other popular positions including aircraft cleaner, chauffeur and NHS call handler.

Adzuna reported that its analysis of more than 5,200 different job titles found that pet sitting had the most amount of interest, with the average salary being £24,210.

Other popular job adverts, based on the number of times they were looked at, included animal handler, animal groomer, and farm manager, the survey revealed.

Adzuna believes that the most in-demand roles for 2022 reflected the changing views of jobseekers since the pandemic.

They found that a total of 24 of the 30 most sought-after jobs offered lower pay than the current average advertised UK salary of £36,339.

Paul Lewis, from Adzuna, commented, “The most sought-after jobs in the UK are roles where workers are doing what they love or giving back to the community, rather than scoring high salaries. Animal jobs are proving particularly popular, with pet sitter roles the most clicked on job ads of the thousands of job roles on our site. Lockdown catalysed an increase in pet adoptions and it seems jobseekers are looking to get in on the act by taking on pet sitting jobs.”

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Payrolled employees reached a record 29.5 million  

According to the latest Labour Force Survey (LFS) published by the ONS, economic inactivity has increased by 0.1 percentage points to 21.2%.   

The increase in economic inactivity since the start of the pandemic was largely driven by those who are economically inactive because they are students or for “other” reasons, revealed the survey. In the latest three-month period however, those who are inactive because they are students continued to decrease, while the increase was driven by those who are inactive because of long-term sickness and “other” reasons.  

The UK employment rate, however increased by 0.1 percentage points on the quarter to 75.5%, while the number of self-employed workers remained low following similar decreases seen during the pandemic. The number of employees increased to another record high and job-to-job moves also reached record numbers in October to December 2021, driven by resignations.   

The survey revealed that the number of payrolled employees also increased monthly in January to a record of 29.5 million while unemployment decreased by 0.2 percentage points to 4.1%.   

Growth in average total pay (including bonuses) was 4.3% and growth in regular pay (excluding bonuses) was 3.7% among employees in October to December 2021. In real terms (adjusted for inflation), total and regular pay fell on the year at negative 0.1% for total pay and negative 0.8% for regular pay. Previous months’ strong growth rates were affected upwards by base and compositional effects. These temporary factors have largely worked their way out of the latest growth rates, however, a small amount of base effect for certain sectors may still be present.  

Kirstie Donnelly MBE, CEO of City & Guilds commented: “With just 4.1% of the population unemployed, we are now nearly back to pre-pandemic levels of unemployment, but we’re by no means back to normality. The labour pool has shrunk dramatically thanks to the double impact of Brexit and the pandemic on our non-indigenous workforce. And the number of open job vacancies continues to increase as businesses struggle to recruit the skilled talent they need – now standing at a record 1,298,400, according to the ONS.”    

Paul Modley, Director of Diversity, Equity & Inclusion at AMS also made comment: “We are seeing more and more talent acquisition leaders encouraging hiring managers to rethink their qualification requirements which can often inadvertently limit the intake pool. While there is often a temptation to use language such as ‘demonstrate superior skills’ in a job description, by making small changes to use inclusive wording such as ‘demonstrate competence in…’, employers are far less likely to put off some candidates from applying. By challenging the language used in job specifications, businesses can make an immediate impact on their ability to tap into a wider talent pool at the very beginning of the recruitment process.”  

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November 2021 saw five times more applications than the previous year 

A national job vacancy survey by CareerWallet has revealed detailed trends and insights into the UK job market. The report has highlighted the huge impact the pandemic has had on the recruitment sector in 2020 as job applications in the last quarter of 2021 were more than three times (369%) higher than the same time last year. 

According to the findings, the massive increase in applications is due to a renewed confidence in the job market and a backlog of employees who stuck out less than perfect roles due to furlough schemes or fears of leaving their roles in the midst of the pandemic. The report revealed that November 2021 was a record month for applications with almost five times as many applications as November 2020 with the surge continuing in December with over three times the applications during the festive period compared to last year. 

The report shows how the market has shifted over the last 12 months as jobseekers are less fearful of the economic impacts of the pandemic. 

Craig Bines, CEO at The CareerWallet Group, commented: “Our national report has highlighted how employees are returning to the job market in their millions across the UK and this number seems to be continuing to rise month on month. The skill shortage issues have been well-documented and as economic fears from the pandemic subside it is now clear that employees are becoming aware of the abundance of new potential jobs available to them.” 

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Growth in total pay increased by 4.3% 

According to the latest Labour Force Survey (LFS) published by the ONS, economic inactivity has increased by 0.1 percentage points to 21.2%.  

The increase in economic inactivity since the start of the pandemic was largely driven by those who are economically inactive because they are students or for “other” reasons, revealed the survey. In the latest three-month period however, those who are inactive because they are students continued to decrease, while the increase was driven by those who are inactive because of long-term sickness and “other” reasons. 

The UK employment rate, however increased by 0.1 percentage points on the quarter to 75.5%, while the number of self-employed workers remained low following similar decreases seen during the pandemic. The number of employees increased to another record high and job-to-job moves also reached record numbers in October to December 2021, driven by resignations.   

Decrease in unemployment  

The survey revealed that the number of payrolled employees also increased monthly in January to a record of 29.5 million while unemployment decreased by 0.2 percentage points to 4.1%.  

Growth in average total pay (including bonuses) was 4.3% and growth in regular pay (excluding bonuses) was 3.7% among employees in October to December 2021. In real terms (adjusted for inflation), total and regular pay fell on the year at negative 0.1% for total pay and negative 0.8% for regular pay. Previous months’ strong growth rates were affected upwards by base and compositional effects. These temporary factors have largely worked their way out of the latest growth rates, however, a small amount of base effect for certain sectors may still be present. 

Kirstie Donnelly MBE, CEO of City & Guilds commented: “With just 4.1% of the population unemployed, we are now nearly back to pre-pandemic levels of unemployment, but we’re by no means back to normality. The labour pool has shrunk dramatically thanks to the double impact of Brexit and the pandemic on our non-indigenous workforce. And the number of open job vacancies continues to increase as businesses struggle to recruit the skilled talent they need – now standing at a record 1,298,400, according to the ONS.”  

Paul Modley, Director of Diversity, Equity & Inclusion at AMS also made comment: “We are seeing more and more talent acquisition leaders encouraging hiring managers to rethink their qualification requirements which can often inadvertently limit the intake pool. While there is often a temptation to use language such as ‘demonstrate superior skills’ in a job description, by making small changes to use inclusive wording such as ‘demonstrate competence in…’, employers are far less likely to put off some candidates from applying. By challenging the language used in job specifications, businesses can make an immediate impact on their ability to tap into a wider talent pool at the very beginning of the recruitment process.” 

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New data released by CareerWallet, a recruitment and employment technology company has highlighted the massive impact the pandemic has had on the recruitment sector as job applications in the last quarter of 2021 were 369% higher than the same time in 2020.   

CareerWallet, who processes 10 million applications a day believes this increase in applications is due to a renewed confidence in the job market and a backlog of employees who stuck out less than perfect roles due to furlough schemes or fears of changing roles in the midst of the pandemic. According to the report, November 2021 was a record month for applications with almost five times as many applications as November 2020 and the surge continued in December with over three times the applications during the festive period compared to last year.  

Craig Bines, CEO at The CareerWallet Group, commented: “Our national report has highlighted how UK employees are returning to the job market in their millions across the UK and this number seems to be continuing to rise month on month. The skill shortages issues have been well documented and as economic fears from the pandemic subside it is now clear that employees are becoming aware of the abundance of new potential jobs available to them.” 

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