Tag: Talent Shortage

Rapid growth in demand and shortage of talent creates tricky situation

Industry specialists continue to warn of challenges in finding the right candidates in the current buoyant software recruitment market.

The rapid upturn in demand and a talent shortage is creating a difficult situation for businesses that wish to expand. Specialists warn that companies need to invest sufficient time, money, and expertise in the employment process if they wish to succeed.

Experts say that one of the reasons for the current challenging situation is an increasing number of recruiters in the technology industry, resulting in candidates receiving significantly more cold approaches than before.

Additionally, remote recruiting has sped up recruitment procedures, even though companies have added layers and touchpoints to ensure that they’re hiring the right talent.

Tristan Heywood, Divisional Director at Oakstone International, commented: “I’m 21 years at Oakstone and I can’t remember a time when we have been busier. Literally every tech company is hiring at scale, which is not only driving salaries up, but also challenging candidates to make the right decision – and that situation is unlikely to change in the near future.”

“There are simply not enough qualified/experienced resources to deliver against the demand across every function – whether that’s technical, marketing, consulting or sales – the average candidate is overwhelmed with offers and for many, the primary metric for measuring an opportunity is on the salary rather than a holistic focus on earnings, culture and genuine career prospects.”

“Software is now driving everything – new banks are essentially technology platforms – and traditional industries are being fully automated by tech and therefore the demand for staff is constant and is only getting bigger and greater and more difficult.

“Companies will also have to think about how to sell their brand to attract the right people. Packaging your opportunity based on earning scope, leadership, personal development and culture will be critical. Otherwise you are in a straight salary shoot-out and if you don’t sell a vision then the risk is that highest payer will win”

Dan Hammond-Smith, Divisional Director at Oakstone International, added: “As we continue to move towards a hybrid working model, most clients who we partner with have adapted and adjusted.

“Those that haven’t – and those that aren’t willing to – will lose candidates because employees are more than ever calling the shots about when they want to be in the office. People’s priorities have changed.”

“There is probably a 20 per cent increase in terms of base salaries within senior technology roles from even where we were last year – coupled expectations of bonus, decent pensions, investment in people’s betterment, learning and well-being – and you have a pretty competitive landscape.

“At the start of 2021, the standard interview process within technology was 27.5 days – now, for most of my clients, it’s 14 days. That’s because they have now got to be even more competitive in the market to succeed.”

All indications are that UK businesses need to continue adjusting and extending sufficient resources in the recruitment process to thrive in the current challenging business climate.

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Businesses must hire carefully to find suitable candidates in today’s fast-paced market.

According to global software and fintech executive recruitment consultancy Oakstone International, businesses face a perfect storm due to massive growth and a shortage of suitable candidates.  

With most industries becoming automated by tech, the demand for staff is constantly growing. As a result, many new recruitment companies have appeared in recent years. In addition, remote recruiting, primarily due to the pandemic, has sped up recruitment procedures.  

The recruitment market is increasingly competitive, and potential candidates are getting many more job offers than they were just three years ago. Decisions are typically being based on immediate financial motivation instead of career prospects.  

Companies are encouraged to invest enough time, money and expertise to attract the right people. If different employers offer potential employees roughly the same money, the candidates will make decisions based on leadership quality, market position and working conditions. 

Tristan Heywood, divisional director at Oakstone, comments: “I’ve been in this business for more than 21 years and I can’t remember a time when I was busier. What is very clear is that everyone is hiring, which is not only driving salaries up, but leading to candidates to make poor choices – and that situation is unlikely to change in the near future. 

“The single biggest challenge is that with not enough people for the volume of roles across every function – technically geared, engineering-related and sales – candidates get many more offers and typically will make decisions based on instant financial motivations rather than career prospects. 

“Some recruiters just throw CVs at businesses in their haste to conclude a deal, but we consider that akin to ‘people trading’ and we don’t cut corners. We invest time in finding the right person for each role – putting the wrong candidate up for interview not only damages our reputation but slows or stops the process.” 

Oakstone International divisional director Dan Hammond-Smith, added: “As we continue to move towards a hybrid working model, most clients who we partner with have adapted and adjusted. 

“Those that haven’t – and those that aren’t willing to – will lose candidates because employees are more than ever calling the shots about when they want to be in the office. People’s priorities have changed. 

“There is probably a 20 per cent increase in terms of base salaries within senior technology roles from even where we were last year – coupled expectations of bonus, decent pensions, investment in people’s betterment, learning and well-being – and you have a pretty competitive landscape. 

“At the start of 2021, the standard interview process within technology was 27.5 days – now, for most of my clients, it’s 14 days. That’s because they have now got to be even competitive in the market to succeed.” 

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REED chairman urges 3 million furloughed employees to leave zombie firms

The latest ONS Labour Market estimates from February to April 2021 continue to show signs of recovery, with a quarterly increase in the employment rate of 0.2% to 75.2% and a quarterly decrease in the unemployment rate of 0.3% to 4.7%.

The number of payrolled employees has increased for the sixth consecutive month, up by 197,000 in May 2021 to 28.5 million – although this is 553,000 below pre-pandemic levels. The number of job vacancies in March to May 2021 was 758,000, only 27,000 below January to March 2020.

While annual growth in average employee pay has continued to increase, the ONS attributes this to a fall in the number and proportion of lower-paid employee jobs. Growth in average total pay (including bonuses) and regular pay (excluding bonuses) among employees was 5.6% for the three months February to April 2021.

Govt support still needed

Commenting on these latest figures, Neil Carberry, Chief Executive of the Recruitment & Employment Confederation, said: “This latest official data confirms the trends that surveys of businesses and recruiters have been telling us. The jobs market enjoyed a strong bounceback during the initial phases of unlocking.

“But with labour shortages across the economy, any delays in hiring could have serious consequences for the recovery. Now that there is a delay to the final stage of unlocking, employers need digital Right to Work checks to remain in place to help them place staff quickly and in line with public health guidance. Government must also extend the targeted support measures that have been in place alongside the restrictions.”

Tania Bowers, Legal Counsel and Head of Public Policy at the Association of Professional Staffing Companies (APSCo), said: “While the ONS data shows that we’re not yet back to pre-pandemic levels, the consistent increases are in line with our own data which showed that permanent vacancies in May were up 116% compared with the same time last year (up from 90% in April).

“However, when we look at who has been most effected by the decline in jobs during the pandemic, the fact that under 25-year-olds have been hit particularly hard is of concern for future skills development. Our members are already noticing a dearth of resources in highly skilled sectors particularly across STEM related roles. With employers already beginning to feel the impact of post-Brexit skill losses, committing to the training and development of talent both young and old will be crucial in helping the UK build back better.”

Jobs boom

Offering a perspective from the UK’s largest recruitment firm, James Reed, Chairman of REED, said: “The latest ONS employment figures do not begin to describe the ‘jobs boom’ that is now underway in the UK. This dramatic change has happened very quickly and will not be apparent from historic data. The talk now will be all about labour shortages, skills shortages and wage increases.

“The key questions are, how fast will the economy grow? And to what extent will progress be limited by labour market constraints? “Last month was reed.co.uk’s best month for job postings since February 2008 – before the last financial crash. Over 275,000 jobs went onto reed.co.uk in May, a 26% month-on-month increase and a 237% year-on-year increase.

“However, the recovery could be curtailed if staff shortages are not addressed urgently. The huge number of workers still on furlough – up to three million by the end of April – is at odds with a labour market which is now growing rapidly and facing a candidate deficit in certain sectors. As a result, we could see wage inflation, making it an ideal time for furloughed workers to depart zombie jobs and seek new opportunities elsewhere.”

Photo courtesy of Canva.com

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