Latest reports show candidate shortfall amid hiring boom

How will candidate shortages affect UK businesses during record growth of hiring activity?

According to the latest KPMG and REC UK Report on Jobs survey figures from August 2021, there has been a rapid surge in hiring activity. Business confidence in the UK economy has continued to rise since May 2021. This, in turn, has resulted in employers increasing their recruitment plans.

Demand remains high

The latest figures for August have shown permanent job placements are at a new high, thought to be a result of the lowering of COVID-19 restrictions and a rise in economic activity. Temporary roles have also increased at a steep rate since May, with this trend continuing into August. However, a record drop in candidate availability has caused pay rates for both permanent and short-term roles to spike at a record rate.

The downturn in worker availability is thought to be a result of several driving forces:

  • Employees are hesitant to change job roles due to the pandemic;
  • COVID-19 and Brexit has meant that many EU workers have left the UK;
  • With the Job Retention Scheme not set to end until 30th September, some staff remain on furlough;
  • Skills shortages that were present in the UK pre-pandemic have continued to grow.

Not a short term issue 

The demand for workers is not restricted to one industry either, with all sectors seeing increased demand during August, across both permanent and temporary staff.

Concerns have been raised across the recruitment industry that these latest reports are signalling that this is not a short-term problem, as the economy steadies itself following the pandemic. In the most recent Report on Jobs press release, Neil Carberry, Chief Executive of the REC, had this to say:

“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.”

Our View

In the current climate, it’s more important than ever for employers to focus on recruitment and retention. Now is the time for employers to be putting their recruitment processes under the microscope. With competition high, there is the temptation to raise pay rates as a short-term fix. But that alone will not fix the issue in the long term.

In a candidate-led market, attracting the best will mean demonstrating why your business is the best place to work. At People Solutions, we do this by taking the time to understand our clients, so that we can create a bespoke solution that delivers maximum impact.

And remember, attraction is only half of the battle! The retention of your existing workforce is crucial. It's essential to focus on developing your employee retention plan.

Whether you’ve got an existing team that needs developing, a future skills gap on the horizon or roles that need filling now, our partnership approach will find and deliver the best solution for your long-term success. Get in touch now to find out how!

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