The findings of the latest Recruitment Employment Confederation (REC) and KPMG UK Report on Jobs, reflect a combination of challenges for the UK jobs market. Most notably, demand far outstrips supply of labour across all sectors, fuelling a further increase in starting salaries and an ongoing skills shortage.
On top of this, the war in Ukraine is leading to greater uncertainty across the economy. Pandemic related issues still remain but have had less of an impact this year with the opening up of the economy. However, lingering uncertainties have contributed to increasing demand for temporary workers over this period.
Meeting the challenge of the talent shortage…
Despite strong demand in the labour market, job vacancies have more than doubled over the past year (+112%), with nearly 1.3 million vacancies in the latest period. This reflects rising demand for workers across all sectors at a time of a dwindling labour supply. The REC report points to several factors leading to this skills shortage and ongoing inability to fill vacancies.
Factors lowering availability of candidates for permanent roles include:
- Reduced availability of foreign workers, particularly EU workers (Brexit and Covid-19 both had impacts on cross-border mobility).
- Hesitancy to take on new permanent roles during the pandemic.
- General lack of skilled labour.
Factors contributing to lack of availability of temporary candidates include:
- Fewer overseas applicants (particularly from the EU).
- Preference among some workers for permanent jobs.
Other general trends have contributed to lack of availability of candidates including the increased rate at which older workers have been leaving the labour market earlier than expected, both by choice or due to long-term sickness. As a result, it is estimated that the UK labour force is 1.15 million smaller than it would have been if pre-pandemic trends had continued.
Harnessing recruitment expertise
With such a challenge to fill roles, expertise is required to ensure workers are sourced as required. That is where recruitment professionals and managed service providers (MSPs) can play a vital role in sourcing scarce talent.
As Neil Carberry, CEO of the REC has said, “Recruiters are filling record numbers of posts, but demand is still rising.
Those firms that are meeting their needs are working more collaboratively with their recruiters”.
Pixid provides software tools such as Pixid VMS that help companies and corporations work more closely with their recruitment providers, playing an important role in assisting the efficient management of the labour supply.
For a fuller analysis of the UK’s latest job data, you are welcome to download the full report here.