The big news from the latest Report on Jobs centres on the headline statement ‘candidate availability falls sharply’.
This is the picture emerging from the past few months which is now bedding in as a notable trend. What’s going on in the recruitment arena?
The recovery continues apace for many businesses and this is reflected in a continuing notable rise in new permanent job starters. June saw record numbers in this regard, and July too would have been record breaking if June hadn’t already got in there! This is matched by temporary jobs rocketing too, with temp numbers expanding in July at the quickest rate since June 1998.
What we’ve got now is a situation where there is not enough candidates to meet the demand, with over 150% more jobs being advertised this summer compared to the one before according to data from the ONS.
Unsurprisingly, therefore, the most recent data points to exceptional growth in starting salaries in an attempt to attract and secure talent. In fact, the rate of salary inflation is the highest it has ever been in the 24 years since records have been kept.
The demand for staff is intense and record-breaking. The demand is across all sectors, although it is most marked in IT and technology, and less extreme in retail.
However, bear in mind that the retail sector was initially struggling to recover following the most recent lockdown – it is good that they are at last following in the footsteps of the wider market.
The candidate supply issue
Whilst there has been a huge increase in the confidence of employers, resulting in high demand for new recruits, the confidence hasn’t yet trickled down to candidates. Candidate supply shortages are still being fuelled by uncertainty from the pandemic with fears for job security still lingering from a tough 18 months, in the wake of Brexit as well as Covid.
We need to be very aware of this as in June the fall in candidate supply was the sharpest rate in the REC’s data collection history, and July was only just behind this.
We need to do more to inspire confidence in candidates in order to ensure business success and recovery isn’t hindered.
Claire Warnes, Partner and Head of Education, Skills and Productivity at KPMG UK, says that;
“job seekers should be taking advantage of the buoyant market to land their dream role.”
But for this to happen, businesses need to inspire candidate confidence.
Additionally, we need to remember that for many it may be a case of needing to upskill and reskill to meet the demand that’s being generated in areas of skills shortages. Just because there are opportunities doesn’t mean that available candidates can walk straight into these roles.
However, as Kate Shoesmith, Deputy Chief Executive of the REC, said:
“This month’s data confirms that it is a good time to be looking for a new job. Employers are desperate to find good candidates for the many jobs on offer and this is reflected in starting salaries rising at the sharpest rate since the survey began in 1997.”
Importantly, she goes on to state,
“Pay increases alone, however, won’t solve the demand that has been building up over recent months. We need an immigration system that flexes to meet demand as was promised, and business and government need a long-term plan for skilling up workers.”
An eye on upcoming changes
What employers really need now is stability and growth, and the current data is optimistic for this.
However, remember that the Coronavirus Job Retention Scheme (CJRS) is due to end at the end of September, and at the end of June we still had 1.9 million people on furlough. This change will affect the current situation.
Likewise with the disruption of the ‘pingdemic’ we need to keep in mind that it will take businesses some time to adjust to changing working models.