The recruitment market has changed from being exclusively focussed on filling vacancies to actively working hard to attract candidates, many of whom are in short supply to fill vacancies. This is evident in the increasing employment rates in the UK with 32.48 million people in work (up from 32.29 million in H1 2018) and the fall in unemployment rates with 1.38 million people unemployed (down from 1.42 million in H1 2018).
However it should be noted that a third of UK sectors have seen the number of advertised vacancies decrease and the number of non-UK born workers in the UK is declining rapidly, with uncertainty surrounding Britain’s impending exit from the EU being a significant factor.
Skills shortages aren’t a new problem in the UK and in this article, we take a further look into how this concerns employers and impacts their hiring inclinations from permanent and temporary perspectives, and the key sectors which are experiencing high levels of skills shortages, courtesy of REC Jobs Outlook.
UK industries are concerned about the availability of candidates to fill permanent (perm) vacancies, with almost half (49%) of UK employers expressing concern in this area. Confidence was higher amongst employers in the private sector compared to those in the public sector, a reversal of December 2017 where the public sector had more confidence in perm hiring.
Between September and November 2018, the most affected industries, in terms of anticipated skills shortages, were hospitality, engineering and technical, and health and social care.
Skills shortages are likely to continue throughout the rest of this year. Both the hospitality and health and social care sectors’ heavy reliance on EU workers is likely to lead to continued fears of a skills gap in 2019 for employers. This is particularly concerning with the £30,000 immigration salary threshold proposed by the government whitepaper on post-Brexit immigration policy that would see a further reduction in the availability of lower-skilled immigrants.
Concern about the availability of qualified temporary (temp) workers increased by 11% (from 35% to 46%), in comparison to the same period in 2017.
As with perm hiring, confidence in temp hiring in the short-term fell in December 2018, with the least confidence amongst employers in the North of England. Again confidence was stronger in the private sector than in the public sector, with employer’s confidence three times stronger in the private sector.
Despite significant confidence in the increase of temp workers in their organisations, over half (51%) of employers in the private sector were concerned about a shortage of candidates. This is considerably more than the 14% of public sector respondents who were concerned about shortages. Does this indicate a far-higher reliance of temp workers in the private sector? Or is the private sector simply looking further into the future for it temp workforce planning needs?
As with the first half of 2018, both the drivers and marketing, media and creative sectors remain the biggest areas where employers anticipate skills shortages.
For both temp and perm recruitment, the most common recruitment channels used are former employees and word of mouth (64% and 72% respectively) – indicating the significant importance employer branding in the world of work.
Staffing levels broadly increased in 2018, with 53% of UK employers reporting that they increased staffing levels over the year. Looking specifically at London, this was up to 60% for London employers. In terms of pay and earnings, Southern employers (outside of London) awarded significantly more workers with increases (68%), than their Northern counterparts (52%).
Need more insights?
If you’re looking for further insights on how the UK recruitment market has fared over the second half of 2018, download our ‘Work in Progress – H2 2018' report which looks at employment and unemployment trends and how they’ve impacted redundancy rates, and young people in the labour market.