Written by Victoria Jolley, Senior Consultant
In the height of the pandemic it was difficult to believe that we would ever be sat in a busy pub with friends again, or that UK businesses would rally and the economy would be set for a resilient comeback. Yet in July 2021, the Office for National Statistics (ONS) revealed that the number of job vacancies exceeded pre-covid levels and there were strong signs of economic growth across the country.
Fast forward almost a year, the ONS has announced that the number of job vacancies in the UK is now greater than the UK’s unemployment level. It’s clear to see that the economy has changed drastically since the pandemic and this news means that there is officially a job for everyone in the UK! Despite the quarterly rate of job vacancies generally slowing down, it is still very positive news and showcases the most sustained period of growth since the end of 2015.
There’s no denying that a lot has changed for everyone in the last couple of years. To the extent that we saw record numbers of employees leaving their jobs at the end of the pandemic and coining the phenomenon ‘The Great Resignation’. Coupled with the huge number of vacancies in the market, finding the right talent is tough and my job as a recruiter is more challenging than ever.
Job seekers now have more choice than ever, driving progress in some areas, however this is also increasing competition between employers and inflating salaries, driving the question, is this sustainable? CIPD found that 44% of employers with hard-to-fill vacancies opted to increase pay in a bid to fill their roles. However, whilst enabling businesses to secure desperately needed talent in the short-term, this creates a problematic employment market if things are taken too far. We’ve recently published our salary guide which you can use as a benchmarking tool to ensure your salaries are in line with averages in the region.
We always advise our clients to ensure their brand is on-point. We don’t just mean eye-catching marketing collateral. We encourage them to really dig deep into the company values and over-arching purpose of a business. After all, the top two reasons cited for leaving a job in 2021 were not feeling valued and not having a sense of belonging. People tend not to leave a job, but they leave a business and this is never just about salary. Shouting about your values, what you really believe in as a business and what you want to achieve allows candidates to find a connection with your business and align their motivators.
The bank of England has recently encouraged employees not to accept, or ask for, pay rises due to the increased cost of living to help combat inflation. However, if you were offered more money, would you say no?
In the financial recruitment market, the changing tides have generated positive change, seeing the base salaries of transactional roles increase to levels which reflect the skill and experience of their workers - which I would argue has been long overdue. In my opinion, changes in moderation are good. Pay increases, flexibility offered to staff in working hours and a combination of office and home working have created much better employment conditions for many. A happy work force leads to greater productivity and hopefully the businesses which put employee experience at the forefront will see the greatest returns, and importantly, staff retention.
Despite the UK economy demonstrating growth at the beginning of the year there have since been a number of significant events that have negatively impacted the cost of living. The Ukraine war, increased interest rates and energy prices are all impacting our economy and analysts fear that the economy could fall considerably later this year. The financial crisis of 2008 led to unemployment levels reaching 10% and it’s likely that the current thriving job market bubble will pop as a result of financial pressures.
If the UK does enter a recession, I would expect to see the demand for permanent roles decline significantly as businesses attempt to retain current workforces and maintain profitability. Temporary hires on the other hand tend to increase as organisations utilitise a flexible workforce to manage increases in workload or to cover fluctuations in staffing levels. Hiring within the public sector, housing, education, and financial services are likely to remain steady – being the all desirable ‘recession-proof’, although unfortunately nothing can be guaranteed.
Everyone's biggest challenge right now is people, and we predict the demand for talent will continue deep into 2023. However, whilst everyone is struggling to recruit, the key is to focus on retention. According to a Microsoft survey 41% of people are considering leaving their role due to lack of belonging and not feeling valued, suggesting that staff are prioritising more than just salary. My advice to any business owner would be to really understand your people, what motivates them, their purpose, and their overall connection to the business in order to prioritise their needs. Essentially, if you’re not willing to adapt and keep up with the needs of your people then you will lose access to the best possible talent.
Secondly, I would encourage you to reach out to myself and the other expert consultants at Four. In challenging times like these we are here to support and advise you on your talent management strategy. We want to get to know you and your company to understand the talent you need and can provide you access to a previously unattainable pool of candidates.
We can help you find permanement or temporary talent across finance, HR, business support, supply chain and at executive level. Get in touch on 01204 326 444 or email us at firstname.lastname@example.org