CIPD has conducted research that has highlighted the fact that employers’ recruitment efforts are being affected by worsened labour and skill shortages. With Brexit looming, there has been a decrease in the number of migrant workers arriving in the UK, which has been creating more pressures on existing staff within businesses.
The most recent quarterly Labour Market Outlook from CIPD and The Adecco Group has discovered that more than 44% of UK employers stated that it had now become ‘more difficult’ to fill vacancies within their organisations over the past year. A further 70% said that at least some vacancies were proving hard to fill.
In the survey, 1002 employers were asked about retention pressures within their businesses, and 34% stated that they felt retention pressures had increased. The senior labour market analyst for CIPD, Gerwyn Davies stated, “It is good news for workers and jobseekers that the labour market is operating at, or close to, full capacity. However, the downside is that rising skill and labour shortages will lead to higher workloads for some workers”. The report also revealed that labour and skills shortages were having a detrimental effect on wages as employers were increasing salaries to counteract the lack of skilled workers available.
Approximately half of all organisations that mentioned an increase in difficulties with recruitment have decided to increase wages in response, and 27% of those organisations have increased salaries for the majority of vacancies. Davies stated that while recruitment and retention pressures may increase income for some, slow growth and uncertainty over Brexit will restrict growth of earnings for other workers.
The country head and president of staffing and solutions for The Adecco Group, Alex Fleming said “our clients are often surprised at the market rates when they are making talent attraction decisions. This ‘supply shock’ and other pressures will only serve to increase these difficulties, which could easily flow out into the rest of the workforce. In turn, this could cause a wider upward movement on wages.” Fleming also warned that employers should be aware that increasing wages is not the only answer to recruitment and retention issues.
A countrywide squeeze on skills has been worsened by the decrease in the number of non-UK-born workers that are employed in the country. In the period between April and June last year and the same period this year, the UK saw a decrease of 58,000 overseas born workers. In the same period between 2016-2017 there was an increase of 263,000 migrant workers, which emphasises the stark contrast. Over the last period both EU and non-EU migrants have decreased, and it is predicted this decrease will continue.
It is now vital that HR companies and departments must take a fresh look at current employment strategies and take time to reassess whether they are correctly balancing the wants and needs of both employees and the business.
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