Cast your mind back to March 2020 and the first UK lockdown – and you will doubtless recall the very genuine fears that the nation would be left with record levels of unemployment post-crisis. Yet in September 2021 the UK’s employment market looks anything but oversupplied with potential candidates. In fact, the recruitment of new employees has become a very real challenge for employers across an increasingly wide range of business sectors.
In the last few months the nation has witnessed job vacancies reach a record high, average earnings rise rapidly, and some employers have even resorted to offering ‘joining’ bonuses such is the urgency and need for new recruits.
The recruitment market has swung from a significant oversupply of candidates to one of acute shortage
Why so few candidates?
So, what has driven such a dramatic and unexpected change in the recruitment market? There are perhaps three key factors to consider:
- The Coronavirus Job Retention Scheme (CJRS) has ensured that many workers remained ‘employed’ during the pandemic restrictions. Latest figures suggest that in July 2021 an astonishing 1.6 million workers were still being supported by the scheme. And, despite the imminent end to CJRS (30th September), the latest figures published by the Insolvency Service indicate that most employers still expect furloughed workers to return to their jobs next month.
- An unspecified – but probably not insignificant – number of workers have either opted to retire early or leave the labour force altogether as a direct result of the pandemic.
- There is the impact of Brexit. Five years of political hiatus and arguments finally reached a conclusion on the 1st January this year, and whilst the statisticians may never be entirely clear as to how many EU nationals have left the UK since the referrendum, it seems likely that estimates of around 1 million workers might not be far off the mark. And many of these EU workers have departed Britain’s shores in the last twelve months alone.
An example
Such a dramatic and rapid exodus of labour was bound to create some UK labour market issues. And one such example featured on the BBC website in June this year. The report centred on a Michelin-starred restaurant in London, who advertised for a receptionist in November 2020, when they received more than 800 responses for that one position.
Yet when the same role was re-advertised just six months later there were only seven applicants. And not one of those seven turned up for the interview.
The blanket response so far from government has been that British employers should invest in British workers
The challenge for employers
The above shows just how quickly the recruitment market has swung from a significant oversupply of candidates to one of acute shortage. And accordingly business groups from many sectors – and not least the CBI – have been calling for a short-term easement of the criteria to import labour from the EU and beyond in the months ahead.
The blanket response so far from government has been that British employers should invest in – and train – British workers. Whilst the political sentiment is laudable, it perhaps overlooks the current commercial and practical challenges being faced by employers.
Recruitment challenges
Skills, qualifications, and experience are all valuable qualities that take a significant fiscal and time cost to be achieved. And those costs increase further if the potential pool of available talent is not a great match for the job role being advertised.
And even if an employer can find suitable recruits and upskill them quickly, there remains a notable time-lag before an employee is able to fully deliver against their key performance indicators. Indeed research undertaken in 2014 suggests that it can take anything up to a calendar year before a new employee reaches their optimum productivity.
All of which suggests that – for the moment at least – employers might be better served focussing on retention of existing employees rather than the recruitment and upskilling of new candidates.
Improving retention
So how can employers improve retention? A good initial step would be for Human Resources (HR) departments to remind line-managers of the business case for good employee retention.
Just as importantly HR departments should aim to equip line-managers with all the collateral and tools needed to reinforce that retention messages with employees. This should include a reminder of the benefits of continued employment, and an indication as to likely career progression prospects as well.
A change of employer could result in the loss of cover provided by some really valuable (but often overlooked) employee benefits offerings
The risks of changing employment
Lastly, but certainly not least, HR should highlight to line managers all the potential concerns for an employee opting to change employer.
The lessening of some employment rights in the first two years of any new employment is often not widely understood by workers, and might acquire a new importance given that the UK still faces the continued threat and uncertainty of another Covid-19 winter ahead.
Employee benefits
And likewise a change of employer could result in the loss of cover provided by some really valuable (but often overlooked) employee benefits offerings. The health-crisis of the last year has demonstrated just how important items such as Group Life Assurance, Group Income Protection, and Group Private Medical Insurance are in protecting employees and their families.
It follows that a break in this cover now might be rather unwise given that the health crisis remains a very real and present risk to all workers.
Recruitment and retention
In conclusion, I would strongly encourage UK employers to think retention before recruitment in the months immediately ahead. Of course recruiting quality candidates remains really important for any organisation, but right now retaining talent – regardless of pay-grade – must be the key focus of the day. And employee benefits could and should be a major component of that approach.
