Skills and labour shortages are forcing employers to rethink their recruitment practices

Employment growth set to continue but pay intentions remain subdued for most workers apart from new hires and key staff, new research suggests.

Britain’s jobs boom is set to continue in the next quarter as employers continue to shrug off the uncertainty around Brexit with new hires.

However, despite the tightening labour market, this confidence has yet to translate into significant salary increases for all but new starters and those with key skills.

As recruitment and retention challenges grow, employers are increasingly flexing their recruitment practices and drawing on a wider talent pool to fill vacancies. 

Pay outlook – pay growth largely limited to key staff and new starters

Recruitment outlook – jobs growth set to continue

Skills shortages are particularly being seen in professional occupations (e.g. scientists, engineers) where 50% of employers report that applicants don’t have the required level of skills needed. In response to skills challenges employers are having to rethink their recruitment practices and draw from a wider talent pool.

The Labour Market Outlook found that:

In line with recent ONS data*, the report also found that employers were making greater efforts to hire those aged over 55 (8%) and those from disadvantaged groups (6%). 

Gerwyn Davies, senior labour market adviser for the CIPD, the professional body for HR and people development, said: 

“The majority of UK workers are long overdue a meaningful pay rise. However, many workers will remain disappointed with their pay packets until there are significant and sustained improvements to productivity. Organisations need to give much greater consideration to the obstacles that are preventing their people from performing better at work. A greater focus on training, development and better people management is needed to lift the UK out of its current productivity crisis. One upside is that many employers are already investing in developing their existing workforce to plug skills gaps. Strengthening workplace training and recruiting in a more inclusive, flexible way will ultimately deliver higher performing and fairer workplaces.” 

Alex Fleming, country head and president of staffing and solutions for the Adecco Group UK and Ireland, states: 

“A skills-short market is not a new phenomenon in the UK; many of our clients have been operating successfully within this market for years. A lot of our clients are becoming increasingly innovative and agile in the search for talent. Organisations who are most effective in this market are those with sustained plans and programs that are aligned to their strategies and culture.

“Candidates with professional qualifications are those that the report highlights as the toughest to find, and these aren’t roles where relaxing the requirements and selecting the best fit is always possible.