Skills shortages threaten to stall employer growth
News that the British Army could be drafted in to deliver fuel to petrol stations amid an ongoing shortage of HGV drivers is the latest in a long line of indicators that the UK is currently in the midst of a dire skills shortage. Today, according to official figures from the ONS, the number of open job vacancies across the UK is currently sitting above one million, representing an unprecedented demand for workers.
Against this backdrop, it is unsurprising that, according to the latest Recruitment Trends Snapshot report from The Association of Professional Staffing Companies (APSCo), the professional recruitment market has continued to perform exceptionally well with huge increases in year-on-year vacancy and placement figures.
Data, provided by growth analytics experts cube19, reveals that monthly figures for contract vacancies showed a 10% increase and permanent vacancies slipped by just 1% in August. Year-on-year metrics for permanent and contract roles showed marked increases — up 47% and 79.5% respectively. This is in keeping with government reports that the number of individuals on payrolls is now very close to its pre pandemic level, currently sitting at 28.9 million, compared with 29 million in March 2020.
As Ann Swain, Chief Executive of APSCo, notes, “We are well and truly back to a highly candidate led market where demand for professional skills across all our sectors is constantly outstripping supply. If we look back at last year, a lot of projects and expansion plans were put on hold and with the economy now back on a growth trajectory, there is a real scramble for the skills needed to fulfil those projects and growth plans”. Swain also explains how we are now also now seeing the effect of ‘the great resignation’ — which is seeing candidates who decided to stay put during the pandemic now looking to move on, leaving a significant void — in addition to the ‘Brexit effect’, “particularly as there is no post Brexit immigration policy that allows skilled contractors to work here on a project-by-project basis — a situation we are lobbying government about as this policy has turned off a whole pool of EU talent that the UK has previously relied on”.
Joe McGuire, Chief Revenue Office at cube19 added, “New contract vacancies are at an all-time high and this is going to further highlight the candidate shortages and the challenges around immigration.”
With the professional jobs market continuing to bounce back from Covid-19, and confidence returning to both candidates and employers alike, it is clear that there is an increasing reliance on professional recruitment firms to help source much needed skills in the professional sectors as talent shortages worsen. This growing reliance on staffing companies to ensure that businesses have the people they need to thrive is reflected in APSCo’s data on sales revenue for the recruitment sector — takings for permanent placements were up 11.5% in the second half of August compared to the beginning of the month.
Downing Street says it is committed to upskilling British workers to address these ongoing skills shortages. However, as Tony Danker, the director general of the Confederation of British Industry (CBI), recently pointed out, you can’t just turn shopkeepers into chefs overnight. He advises that we need a managed system to bring in foreign labour to ease the current skills shortages. Experts across the recruitment sector — including APSCo — agree that post-Brexit immigration policy must be reviewed and that there should be an entry route into the UK that both allows and encourages high value independent professionals to work in the country on a project-basis. Only time will tell if or when government will heed the recommendations of a growing chorus of expert voices.
While the future of skills availability across the UK remains uncertain, one thing is for sure: these talent shortages threaten to stall employer growth and, consequently, the UK’s post-Covid economic recovery. Meanwhile, for individuals looking to switch roles, there has never been a greater number of variety of vacancies available — jobseekers are holding all the cards and must take advantage of this unique moment in time to propel their careers to the next level.
