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Tag: Skills Shortage

Australia looks to overhaul immigration system

Changes would include end to freeze on minimum wage for migrant workers

Australia is considering significant changes to its immigration system to enable highly skilled workers to enter the country more quickly and become permanent residents. The federal Labor government is planning to modify the points test used to select skilled migrants, which will assist in identifying individuals with the skill sets that are required for the Australian economy. Home Affairs Minister Clare O’Neil stated that the current migration system is broken and is failing businesses, migrants, and Australians, and it cannot continue to do so. The government intends to expedite and simplify the visa process for high-skilled professionals and take steps to retain international students.

Furthermore, temporary skilled visa holders, who were previously denied the opportunity to apply for permanent residency, will be able to do so by the end of this year. The Australian government is also looking to end the decade-long freeze on the minimum wage for skilled migrant workers. The Temporary Skilled Migration Income Threshold, which had been frozen at AUD 53,900 ($35,600) a year since 2013 by a previous government, would see a new minimum wage of AUD 70,000 ($46,300) come into effect from July 1.

Clare O’Neil, Home Affairs Minister commented: “What has emerged is a system where it is increasingly easy for migrants to come to Australia in search of a low-paid job, but increasingly difficult for migrants with the skills that we desperately need. One of the reasons there is so much exploitation in Australia is because we have allowed low-wage migration programs to operate in the shadows.

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Green jobs market at risk due to ongoing skills shortage.

UK businesses need to upskill workers to compete in sustainable marketplace

Despite the green jobs boom – almost 70% of business leaders believe the country is heading towards a green skills shortage – particularly in the areas of sustainable engineering and finance.

Research carried out by leading recruiter PageGroup, shows businesses need to upskill their workers to compete in the sustainable sector and employees are increasingly concerned about the impact climate change and net-zero commitments will have on their current roles.

Key research findings;

  • 57% believe these specialised skills are important to their business – but many are struggling to find skilled staff.
  • 27% are actively identifying opportunities and anticipating future business needs.
  • 26% investing in professional training to upskill and prepare their existing workforce.
  • 23% are offering more on-the-job training and apprenticeships.

A separate poll of 2,000 employed adults found 27% are eyeing up a green job as their next career move but many are unsure if they have the necessary skills.

The research commissioned by global recruitment experts Michael Page, showed 47% are considering work in the renewable energy sector – with many also seeing sustainable investment and sustainable construction as viable options.

Half of the employed adults considering the switch wanted a role that positively impacted the planet, while 36% wanted to future-proof their careers.

To ensure their skills are compatible with future green jobs, 28% plan to undergo training related to their current specialism, with 26% exploring online courses to achieve the necessary qualifications.

Joanna Bonnett, Head of Sustainability at PageGroup, said, “To ensure the UK succeeds in its green transition efforts, it’s crucial for policy makers, businesses, and educational organisations to collaborate and invest in properly preparing the workforce. Doing so, will create a pipeline of talent that is ready for the jobs of the future and tackle the green skills shortage, which, if not addressed, could drastically slow down net zero efforts.

“With one in five companies currently recruiting for green positions, it’s clear they recognise the significance of the green transition, and importantly, the benefits it brings to their business and workforce.”

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Modest employment growth, according to ONS latest figures

Average regular pay growth for the private sector was 7%

UK employment rates continue to show modest growth, with the employment rate rising 0.1% to 75.7% between November 2022 and January 2023. The increase in employment was mainly driven by part-time employees and self-employed workers, according to the latest report from the Office for National Statistics (ONS).

The timeliest estimate of payrolled employees also showed an increase of 98,000 in February 2023 compared to January 2023, bringing the total to 30.0 million. However, the unemployment rate remained largely unchanged at 3.7% during the same period. The number of people who have been unemployed for over 12 months saw a slight increase in the latest three-month period.

Economic inactivity, on the other hand, decreased by 0.2% to 21.3% in November 2022 to January 2023. This was driven by people aged 16 to 24 years, and by people who are inactive because they are students or retired.

However, the estimated number of vacancies fell by 51,000 on the quarter to 1,124,000 in December 2022 to February 2023. This marks the eighth consecutive period of declining vacancies and reflects uncertainty across industries, as respondents continue to cite economic pressures as a factor in holding back recruitment.

The report also showed growth in average total pay (including bonuses) of 5.7%, while growth in regular pay (excluding bonuses) was 6.5% among employees in November 2022 to January 2023. Average regular pay growth for the private sector was 7.0%, compared to 4.8% for the public sector. However, in real terms, growth in total and regular pay fell by 3.2% and 2.4%, respectively, after adjusting for inflation.

Labour disputes also saw a decline, with only 220,000 working days lost in January 2023, compared to 822,000 in December 2022. Meanwhile, workforce jobs rose by 211,000 on the quarter to a new record high of 36.4 million, with six of the 20 industry sectors reaching record high levels in December 2022.

Overall, the latest report from the ONS indicates a mixed picture of the UK’s labour market, with modest employment growth and declining vacancies but still some uncertainty across industries.

Lauren Thomas, Glassdoor Economist commented: “Wage growth may be hitting record highs but this is not being felt in workers’ pockets. Glassdoor’s data shows discussion around inflation and the cost of living is up 171% year-on-year. Employers need to consider how they can help their workforce through this difficult period – whether that’s through pay rises, other benefits, or improving working conditions.

Kate Shoesmith, Deputy Chief Executive of REC, said: “Our analysis shows that labour and skills shortages could cost the UK economy up to £39 billion per year from 2024 – around the same as two Elizabeth lines. Government and business must reach out and help those furthest away from the labour market into work if we are to fill new job vacancies – which our own data shows hit a 14-month high in February.

“Firms can also step up on how they employ and engage. The government can help business by taking the big opportunity in the Budget tomorrow to provide clarity and stability on its growth plans. It is a big test for the Chancellor on skills, transport and tax. We need to see creative and revitalised policies on tackling economic inactivity, from rethinking low-skilled immigration policy to support for the over 50s.”

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Talent attraction and retention biggest challenge, say private capital funds

Automation and cyber security roles cited as the biggest concern

According to a new study commissioned by Intertrust Group1, three-quarters (75%) of private capital funds are struggling to recruit and retain new talent with skills shortages at their most acute in areas such as automation and cyber security. Other major problem areas were said to include the widening skills gap due to changing demands (44%) and Diversity, Equity, Inclusion and Belonging (DEIB) related challenges (41%).

There are fears among private capital fund leaders that the talent gap between vacancies and suitable candidates will only increase – 60% of private capital fund managers expect this to widen over the next five years.

The study, Introducing the Halo Framework, based on interviews with 150 senior decision-makers in private capital firms, hedge funds and private wealth managers with between US$12.5b and US$29.5b in assets under management, reveals that many fund managers are no longer insisting on specialist experience and are instead looking for people with a more generalised background who they can upskill or reskill across different function areas and rotate them as necessary.

As a result, more than 40% of respondents believe their existing training programmes will be insufficient and will therefore become a key challenge over the next five years unless they are upgraded.

Intertrust Group’s study highlights the talent gap is particularly acute in automation and cyber security, with over half (56% and 51% respectively) claiming they will need to develop workaround solutions to mitigate the skills shortfall.

The war for tech talent was cited as the biggest obstacle facing private capital firms looking to improve their data analytics and onboard next-generation technology, with almost two-thirds (64%) admitting that they struggled to recruit and retain suitably qualified staff.

Chitra Baskar, President, Fund Solutions, Intertrust Group, commented: “Most private capital firms are struggling to recruit into highly competitive technology-related roles and are increasingly seeking support from their strategic outsourcing partners to combat this. Sophisticated service providers invest a substantial amount in ongoing training and competency building within their teams and are well placed to plug in-house talent shortages.

“Our Halo Framework highlights the importance of ‘empowering your people’ as one of its core areas of focus – encouraging firms to recruit from all backgrounds, develop skills and knowledge with a tailored talent management strategy, rotate jobs so staff experience different value streams, and build a knowledge exchange system.”

A trend noted in the research is private capital firms finding it difficult to retain top talent. Firms are on a journey of business and technology transformation and to succeed, they will need people who understand next-generation technology systems, different alternative asset classes, regulations, risk management, data analytics, and mid-/back-office operational aspects. Post-COVID, developing an effective return-to-work policy and a robust hybrid working model is essential, with around 43% of the surveyed financial services firms who believe that more than a quarter of their workforce will work remotely in the future.

1 Intertrust Group’s study: Introducing the Halo Framework was conducted by Everest Group. The findings are based on interviews conducted between August 2022 and September 2022 with industry experts and a survey conducted among 150+ leaders and business heads of private capital firms, hedge funds, and private wealth managers based in EMEA, Asia Pacific and the Americas.

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Workers are resisting the call to return to the office

New candidates less likely to work remotely

UK’s Net Employment Outlook has fallen to +25% for Q4, according to the latest ManpowerGroup Employment Outlook Survey (MEOS). This figure shows a decrease of eight percentage points compared to Q3 and six percentage points year-on-year.

The MEOS is the most comprehensive employment survey of its kind and is used as a key economic indicator by the Bank of England and the UK Government.

The survey reveals that hiring confidence is still positive across all sectors, but new candidates have less bargaining power, with employers focussing on retaining their existing workforce.

In the survey, 2,030 UK employers were asked whether they intend to hire additional workers, maintain their current headcount, or reduce the size of their workforce in the coming quarter.

For the second quarter in a row, the Banking, Finance, Insurance, and Real Estate sector are in the lead with a Net Employment Outlook of +40%. This, however, is a decline of nine percentage points in Q3 and nine percentage points year on year.

Looking specifically at London, employers report an Outlook of +28% for Q4. This is a decline of 13 percentage points since last quarter. In Q1, employers in London were least likely to ask employees to work in the office full-time. Empty office space in London increased by 51% since the beginning of the pandemic, showing that working from home remains popular despite the increased cost of living, making working from home less affordable.

Chris Gray, Director at ManpowerGroup UK, said: “Employers are keen to get people back into the office, however employees still have a lot of bargaining power.”

“Over the last 12 months we have seen employers offer unprecedented benefits, from hefty signing bonuses to fully remote working, in order to attract skilled candidates. However, as demand for new workers cools, candidates are less able to secure these benefits – but many existing employees don’t want to give them up. One of our clients saw 75% of employees decline new contracts that didn’t guarantee fully remote work. This leaves employers engaged in a balancing act of keeping their existing employees happy while phasing out remote work for new candidates.”

“We’re seeing a shift from candidates holding all the cards to employers now having the leverage to ask candidates to come into the office – at least some of the time. Existing employees are more likely to have the bargaining power to retain their home working benefits, but new candidates will increasingly see pandemic-era benefit offers in the rear-view mirror.”

“As household energy bills hit record levels, trends may shift slightly with existing employees keeping their options open where possible to maintain their bargaining power. Decisions on whether to go back into the office will be based on individual circumstances. This is especially true for employees who moved away from big cities where commuting is most costly.”

“Despite the shift in power from candidates to employers, the fight for talent is still firmly underway, and employers need to meet candidates half-way to attract the best talent. That means offering sustainable benefits like increased annual leave and flexible working arrangements alongside increases in pay.”

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HR vacancies on the rise as skills shortages worsen

HR profession becoming a priority for recruitment 

Recent research from the Association of Professional Staffing Companies (APSCo) has found that HR vacancies are likely to be up by 13.5% on 2021. The HR profession is becoming a priority area for businesses to recruit for.

According to the data provided by business intelligence specialist, Vacancysoft, internal recruiters are the most wanted specialists. Thirty-five percent of all HR vacancies this year have been for internal recruiters. Training/learning is sitting at 14% of total vacancies.

The specialism which is growing both in volume and share is HR generalists, at an increase of 64% as the monthly average between last year and this. The total share rose from 13% to 14.3%.

In terms of the sectors recruiting for HR, technology has had 3,994 vacancies so far, with 17.5% of the total number of HR jobs. Second on the list is Retail, with 3,833 roles so far (16.8%). Despite the importance of Banking to the UK economy, it is only responsible for 7% of HR vacancies in the HR sector. This is possibly linked to the cost-of-living crisis and the inevitable impact on the UK economy.

When looking at the different regions, London dominates with 8,995 vacancies this year, accounting for 39.6% of the total HR vacancies posted. The South East follows with  2,637 vacancies, accounting for 11.6% of HR vacancies.

Ann Swain, CEO of APSCo, comments: “As the UK’s economic pressures mount, a decline in vacancies is to be expected. However, since the UK remains in the grips of a skills shortage, hiring teams and recruitment professionals alike will continue to be in high demand. While HR will have a key part to play in narrowing the skills gap, we will also need to call on the country’s policymakers to implement an internationally viable approach to boosting the UK’s access to skills, alongside building a more attractive entry route into the country for highly skilled self-employed professionals.”

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Firms hesitant to hire amid recession concerns

60% of companies said they need more employees to manage their workload

According to poll data released by Express Employment Professionals, companies are becoming more hesitant to hire amid worries about a possible recession and other concerns.

Nancy Reed, an Express franchise owner in Texas said: “In our market, the big fear is a recession. Businesses aren’t confident in the future, and recession talk has employers waiting to see what will happen next.”

According to Reed, employers have been tolerating more absenteeism, tardiness and less experience, but that is changing.

“Now, they are holding off to see what happens,” she continued. “Managers will hire that skilled employee who is ready to come back but are holding off hiring any extra help until they see what will happen with the recession.”

Businesses aren’t panicking yet, but there are signs of cautious hiring, said Chris Cary, an Express franchise owner in Virginia.

Cary said: “In one of our markets, we are not seeing this rear its head dramatically at the moment, but in speaking with business owners and leaders, there is a sense of what is around the next corner with inflation and chatter of a recession.”

According to a poll by Express Employment Professionals that took place in May, 60% of companies said they need more employees to manage their workload but don’t have the capacity to hire them. Of those who lacked the bandwidth to hire additional employees, 48% reported it’s because their company is adjusting its recruiting/hiring strategy. In addition, 42% said their company is waiting to see if the workload will level out before hiring additional employees.

Other concerns: 32% said upper management has not approved hiring of additional staff, and 32% do not have enough money in the budget this year to hire additional staff.

The survey was conducted on behalf of Express Employment Professionals by The Harris Poll and took place between May 3 and May 23. It included 1,003 US hiring decision-makers.

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SAP announces new training initiative

The programme provides a full-time curriculum to train participants in a bid to stave off skills gaps 

SAP SE announced the launch of its Partner Talent Initiative. The initiative aims to identify and train new and existing talent in the SAP Partner Ecosystem in order to support increasing demand within the IT channel for skilled certified professionals.

Participants who complete the programme will graduate with three SAP certifications before re-entering the partner ecosystem as graduates who are ready for employment. The programme provides full-time curriculum designed to certify IT professionals in crucial and high demand areas including  RISE with SAP S/4HANA Cloud as well as an introduction to SAP S/4HANA Financial Accounting.

Two cohorts have already started the programme and following successful completion, graduates will begin a three-month intensive training program that will equip them with the professional and personal skills needed to become an SAP consultant.

SAP’s partners are in demand as the SAP EMEA North cloud services market is growing at CAGR of 16% which has resulted in a digital skills gap. The new programme is open to both recent graduates and those working in complimentary industries and will help address existing gaps in talent by equipping graduates with the skills and qualifications that they need to find employment in the partner community.

Participants will receive ongoing support and continuous feedback from delegates, instructors and the wider partner team throughout the training period and will also have an executive welcome and kick-off event upon joining. Participants will be given the option of attending a physical graduation ceremony upon completion.

SAP also announced that a business development fund (BDF) incentive to partners who recruit, train and certify new consultants under the Drive2Deliver partner capacity initiative.

The Partner Talent Initiative also includes:

  • Access to enablement content for members of SAP partner ecosystem
  • First-hand practice on live SAP software training systems
  • Expert-led and peer-to-peer learning environments
  • Opportunities to obtain SAP Global Certification digital badges and stay current with ongoing technology advances

Celine Cazali, chief partner officer, SAP UK & Ireland, made comment: “By launching the Partner Talent Initiative, graduates of the program will learn invaluable skills, helping customers and partners successfully become Intelligent Enterprises and provide high-quality services. Through a rigorous curriculum, combined with continuous feedback and support, our programme will equip the next generation of consultants with the mindset, skills and ambition needed to succeed in the channel and beyond.”

Paul Cooper, chairman, UK & Ireland SAP User Group (UKISUG), also commented: “We welcome the creation of the Partner Talent Initiative as it will help address a potential skills gap in the future. Our most recent member research highlighted that many organisations are concerned a lack of available skills will impact the speed their organisation moves to SAP S/4HANA. A thriving partner ecosystem with more certified talent will be essential in supporting customers’ SAP S/4HANA journeys and developing the next-generation workforce.”

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Start-ups allocate much investment funding to tech recruitment

Funding also channelled to skills development to counter skills shortage

According to new data, 54% of start-up businesses that have secured PE or VC funding in the last year invested capital in recruitment. This is up from 37% of start-ups that received funding before the pandemic.

According to Robert Half’s Demand for Tech Talent report, the focus on recruitment is a response to the current tight hiring market, with its challenges of securing top talent.

The research showed that businesses that have recently completed a funding round are looking to hire 206  new staff on average. This is why these start-ups allocate almost a quarter of their funding to hiring tech talent. This number is up from the pre-pandemic average of 18%.

To counter the skills shortage, many start-ups are also looking at upskilling existing employees to fill gaps. Fifty percent of tech leaders stated that their business spent at least some capital from a recent funding round on upskilling and training to ensure that talent shortages don’t stop them from achieving their goals.

The research went on to show that businesses that received funding in the past 12 months are more likely to invest in people than in mergers & acquisitions.

With scale, the priorities of small start-ups shift to hiring talent for business intelligence, leadership, and dev-ops roles. These help the new businesses find direction, develop a strategic growth plan, and ensure that their products are ready to handle rapid growth.

Larger enterprises with recent funding tend to focus on data management – which is essential for handling customer demand and protecting brand reputation. Large organisations focus their hires on information security (46%), cloud and infrastructure (44%), and business intelligence (43%) roles.

Robert Half’s updated 2022 Salary Guide showed that with the demand for business intelligence and data analytics roles, starting salaries in this area are currently the fastest growing in tech. Salaries have increased by 7.7 % over the past six months.

Craig Freedberg, Regional Director – Technology, at Robert Half, said: “Increasing headcount is crucial to being able to scale a business, but with start-ups looking to make mass hires after a funding round, adding to the existing demand in the market, it is becoming harder to secure skilled talent. Supply simply cannot keep up with demand, which is why businesses are investing more to find candidates and compete on salaries.”

“We work with businesses of all shapes and sizes, and their hiring priorities vary dramatically based on their ambitions for the future. While business intelligence and data roles are critical for identifying opportunities and threats wherever an organisation is on its journey, the demand for all tech roles is intense in today’s market.

“Everyone is playing the same game, and tech leaders need to think carefully about their strategy to ensure they have a competitive advantage when it comes to attracting and retaining great talent.”

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Engineering replaces IT as most attractive sector to work

61% don’t believe they have the skills to enter most sought after industries

After five years of falling outside the top three, engineering is now at the top of the list of most desirable sectors to work, overtaking IT & Communications (ITC), which held the top spot for the previous four years. Sixty percent of respondents, a 10% increase from 2021, said they were willing to work in the Engineering sector.

According to the new research from Randstad, surveying  163,000 working-age people, ITC has fallen to third place at 58%. The study also revealed that 70% of workers are open to job opportunities. Forty-eight percent are willing to quit their jobs if the work stops them from enjoying their lives. A further 34%  admitted to leaving a role because it didn’t fit within their personal life.

Second on the list of attractive sectors is the Automotive industry at 59%. In fourth place is the Agriculture sector at 57%, followed by the FMCG sector at 55%.

The study also found that different regions in the world have different views as to what the most attractive sectors are. For example, European respondents ranked the Automotive sector as number one (46%), followed by Life Sciences (44%) and Industrial (44%).

The Automotive sector was also in the top position (73%) in Latin America, followed by Industrial (68%) and FMCG (68%).

According to the study, even though workers are attracted to certain industries, 61% feel they don’t have the skills required to enter the industry. Sixty-five percent believe they lack the skills to work in the engineering industry. Some industries are even higher, such as the chemical sector, at 72%, and the construction sector at 69%.

On the other hand, 46% believe that the skills to work in the retail industry, and 43% believe they have the skills for the hospital industry. A further 42%  believed they had the required skills for the ITC sector. In addition, the research indicated that more white-collar workers (41%) feel that they have the skills to work in any sector, whereas only 34% of blue-collar workers feel this way.

The research also showed that 76% of employees agree that being offered the chance to reskill, while only 61% feel that their employers offer these opportunities.

Joanna Irwin, Randstad CMO, commented: “This year’s Randstad Employer Brand Research signals that the tides are changing in terms of which sectors are seen as the most attractive for employees. Increasingly, talent wants to work in sectors that make an impact in both the physical and digital world.

There’s still a job to do for employers in these sought-after industries to ensure that they are removing the barriers to entry for willing talent. Offering reskilling and upskilling programs can help employers stand out from the crowd and attract workers.”

No matter which sector is considered to be the most attractive, employers must offer compelling employee value propositions to ensure that they attract the best talent.

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