While significant events overseas may have knocked UK skills shortages off the front pages, HR professionals on the ground are still grappling with major talent gaps.
In recent weeks, it has been reported that the UK film industry will have 40,000 unfilled vacancies by 2025 as demand for content booms. The UK economy suffers a loss of £1.5bn every year due to STEM skills shortages with a reported gap of 60,000 graduates annually in the sector, and government data reveals a worrying lack of younger HGV drivers as skills shortage in the sector remain severe. Britain is also facing a shortfall of farmers, marketing professionals, and healthcare workers – the list goes on.
There is no doubt that resources are continuing to be squeezed. As Jon Boys, labour market economist at the Chartered Institute of Personnel and Development (CIPD) succinctly summarises: “A year ago we were worried there would be not enough jobs and too many candidates for them. Now we are worried that there are too many jobs and not enough candidates.”
Looking at the professional labour market specifically, the latest Recruitment Trends Snapshot report from the Association of Professional Staffing Companies (APSCo) shows that permanent job vacancies in the UK increased by 22% for the period between February 2021 and February 2022. Contract vacancies were also up 26% during this timeframe.
The data, provided by the global leader in software for the staffing industry, Bullhorn, did, however, indicate a slight month-on-month dip in the number of new vacancies for both permanent and contract roles, which were down 11% and 12% respectively in February when compared to January this year. This suggests that we may, at last, be witnessing the stabilisation of the skills crisis, if not an improvement.
That said, while we are now beginning to see the inevitable slowdown of the intense activity of the last few months, make no mistake: we are still in a situation where demand for skills is far exceeding supply across the professional sectors.
According to APSCo’s statistics, permanent placements rose 13% last month following January’s 104% spike in vacancies, which is indicative of the continued pressure on the staffing sector. Year-on-year comparisons also continue to show significant growth with permanent placements up 62% between February 2021 and February 2022, while contract placements also rose year on year, up by 15%.
As Joe McGuire, Sales & Strategy Director at Bullhorn, explains, “Placements continue to track well and with job rates at such high levels already, it is not unexpected to see slight dips every so often. Demand for candidates remains extremely high so when looking for meaningful changes in the direction of demand, this should be done over longer periods of time.”
Experts agree that the explanation for the current strength of the labour market is simple: demand for workers has been going up at a time when their supply has been limited. On the demand side, the reopening of the economy as the pandemic loosens its grip has meant stronger competition for staff. On the supply side, a combination of factors – not least Brexit and the fact that professionals switched sectors when opportunities were thin on the ground – means the labour force is smaller now than anticipated. There has also been a dip in inward migration to the UK, and many workers who were nearing retirement age never returned to their careers after the worst of the pandemic was behind us.
The professional recruitment sector and internal HR teams both have a vital part to play in unearthing the hard-to-find talent needed by organisations across the UK and indeed internationally – however, we could also benefit from greater support from the government to overcome the hurdles we face.
Despite the slight slowdown in vacancy numbers in February, it is clear that UK’s current skills landscape is not fit for purpose in the modern world, with ongoing skills shortages putting future economic growth at risk.
In our Access to Skills and Talent Public Policy Plan, we have called on the government to rethink training initiatives and visa routes for highly skilled international talent to support a dynamic, global, and flexible labour market. We continue to meet with government representatives to demonstrate the value of a globally focused recruitment sector, a globally mobile talent pool of independent contractors and the benefits of introducing a work visa for self-employed highly skilled contractors.
The Prince of Wales recently recommended that refugees fleeing their war-torn homeland could help fix Britain’s “enormous skills shortage” and should be “welcomed”. However, while I appreciate the sentiment behind this suggestion, we shouldn’t have to rely on people being forced from their homes to bring in the skills we need to thrive.
It is crucial that businesses are able to procure the skilled talent they need from overseas – and this includes independent professionals. The arrival of Covid and the ending of free movement from the EU created a perfect storm in the labour market. There is a distinct skills shortage across high skilled areas of work, such as engineering, life sciences, digital and Fintech. However, many within these fields work on projects rather than being bound to one specific role. To bring about a more highly-skilled and flexible workforce, a specific visa route is needed for such highly-skilled, self-employed project workers from abroad who will be vital to plug the short to medium skills gap as the UK looks to up-skill and re-skill.
Professional vacancy numbers may have dipped slightly month on month, but as HR directors operating in the professional sectors will attest, the skills shortage is far from over. And with new staffing budgets being set to align to the coming tax year, we may soon see demand for candidates jump once again. The HR and staffing sectors are working hard to attract and secure the brightest talent – but we can only do so much. The government must do more to ensure that British businesses have access to the people they need to thrive.
