Permanent vacancies growing at quickest rate in 24 years.
The UK’s skills shortage is set to continue on an upward trajectory, according to the latest snapshot report from The Association of Professional Staffing Companies (APSCo) and Cube19. The report found that employers are struggling to fill roles in several sectors, with permanent job vacancies growing at the quickest rate in 24 years. But with fewer skilled candidates to fill the roles it’s a challenging time for recruiters.
The latest snapshot report (July 2021) reveals the UK has seen increases in both year-on-year and month-on-month vacancy and placement figures. There was a 10% month on month increase in permanent vacancies, with contract roles up by 14%; this upturn was mirrored in year-on-year data, which shows rises of 72% and 90%, respectively.
The professional sector is booming and sales revenue for the recruitment industry reflects a tremendously strong and buoyant labour market. It’s a positive time to be in recruitment, with a record number of jobs being created and an increasing demand for talent. Permanent and contract placement sales revenue in the UK grew 77% and 102% year-on-year, respectively. Monthly growth was 12% across both permanent and contract placements.
The APSCo and Cube19 snapshot survey shows businesses across the country will ramp up hiring in the next 3 months, with 38% reporting they expect to expand their workforce. However, latest figures from the British Chamber of Commerce show in Q2, 70% of businesses planning to hire new employees were experiencing problems recruiting candidates.
And it doesn’t look like job growth will slow down anytime soon.
The number of jobs in the professional sector has increased for the fourth consecutive month, but with nearly 60% of recruiters reporting reduced candidate availability, agencies are finding it difficult to attract talented candidates quickly enough to keep up with demand.
Major skills shortage in UK labour market.
Despite business confidence growing, skills shortages are still a major concern for firms across all sectors and regions.
The UK’s employment outlook is strong, with vacancies for skilled hospitality, catering, construction, driving, and IT workers among the highest in demand. Employers in the construction sector reported most difficulties in recruitment, with 82% experiencing issues filling positions, with hospitality and catering just behind at 76%.
Businesses need more people with the right skills to help them grow, but recruiters are finding the challenge of matching jobseekers to available positions is becoming harder. The UK is facing a ticking time bomb, with a long-term skills shortage being predicted in coming years, which could slow down the UK’s economic recovery, according to a recent report from KMPG and REC.
The scale of the challenge is clear from the fact that even before Brexit and the pandemic hit, firms were already finding it difficult to recruit suitable candidates. And in recent months agencies have become even more concerned about their ability to find candidates with the skills their clients need.
The UK’s skills shortage is a crisis of epic proportions and not one that will be solved in the next three months. Brexit, a backlog in training, the furlough scheme, lack of funding for training and apprenticeships and increased movement of people because of the pandemic, have all contributed to there being fewer experienced, skilled workers available.
There is still uncertainty about the number of overseas workers that have left the UK and returned home during the past 16 months – and whether post-Brexit immigration rules will put them off returning. One estimate predicts that in a worst-case scenario, instead of the population increasing by 350,000, it will decrease by over 1.3 million, which would be the largest fall in the UK resident population since World War Two.
The government is advising businesses to support UK talent, by investing in training and apprenticeship programmes, rather than relying on immigration to fill the skills shortage.
There’s no doubt that the UK’s professional recruitment sector is getting busier, as lockdown measures continue to ease, and the economy stabilises in the aftermath of Brexit and the pandemic. The UK recruitment sector is the largest in Europe, directly employing 119,000 workers and supporting £86 billion in gross value added across the economy – that’s the equivalent of 4.3% of Gross Domestic Product (GDP) – larger than either the accounting or legal industries.
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So, what strategies can agencies use to keep up with demand?
Option # 1: Hiring and training new recruitment consultants.
Unfortunately, it’s not as simple as just hiring more recruitment consultants, as agencies face the same skills shortage as other sectors. This means that agencies themselves must think outside the box when it comes to recruiting staff.
One option is to recruit graduates and put them through an in-house training programme. This approach works well for larger recruitment businesses but may not be viable for smaller, independent agencies. Training recruitment consultants can also be a long and costly process and with vacancy growth at a record high, a more immediate solution may be needed.
Option # 2: Funded recruitment consultant apprenticeship
Recruitment is a key part of any business and in order to ensure you are attracting the best talent, it’s important to be innovative with your recruitment strategies. The introduction of the apprenticeship levy in 2017 presented a new strategic opportunity for agencies to develop professional skills, to meet business ambitions and goals.
Apprenticeships can be one way to develop and grow a team of loyal recruitment consultants. Not only do recruitment apprentices learn core technical skills and gain recognised qualifications, but they also develop the soft skills and behaviours needed to become a successful recruitment consultant.
But again, this option doesn’t offer a quick fix.
Option # 3: Outsourced recruitment and administration support
Hiring challenges can put a strain on any business, but for recruitment agencies needing to source a large number of skilled candidates in a short amount of time, the challenge can seem even more overwhelming. This is where a partnership with an outsourcing recruitment company can help fill your open roles quickly.
Outsourcing recruitment and administration support means agencies can manage workload expertly, in line with market demand. Candidates are the lifeblood of a recruitment agency but with fewer candidates and more job vacancies, recruiters are on the front lines in the battle for talent.
Hiring recruitment outsource professionals such as IMS People Possible to do your CV sourcing and formatting, accurately post jobs, talent mapping and database cleansing and maintenance can help you get the talent you need for your business – without putting increased pressure on recruitment consultants.
While some agencies are more focused on the short-term results of filling a position quickly, the most successful agencies recognise the importance of building relationships with candidates and treating them like valuable assets. The most talented recruiters are no longer just matching a candidate with a role; they’re teachers, motivators, advisers, and confidants to their candidates. In other words, today’s recruiters have become problem-solvers who help potential hires reach their full potential.
Deciding to outsource means agencies can maintain a high level of candidate experience and engagement, speed up the recruitment process to avoid losing talented candidates to competitors and react quickly to changes in labour market conditions.
In today’s fast-paced, high-stakes recruiting environment, it’s vital that recruiters attract the best talent and create positive candidate experiences. If you take the time to invest in and develop a relationship with your candidates, they are more likely to come back to you throughout their career.
Outsourcing offers the flexibility of calling on expert help to meet the demands of a growing labour market. Whether you need help with recruitment administration, short and long listing candidates, full-time recruitment roles or full cycle recruitment services, outsourcing offers the perfect solution.
The recruitment industry has never been so exciting, with so many new opportunities–and with candidate supply outstripping demand, there’s never been a better time to outsource your recruitment.
