Amongst the growing list of upcoming changes and challenges for business recruitment, retention and attraction are all in every leader’s top ten, if not top five. With recent tax rises and the cost of living crisis, real pay is at its lowest since 2001. As we head deeper into a recession a squeezed workforce is far from ideal for both employees and employers. Undoubtedly there is a turbulent path ahead of us all, but it is not all negative. There is plenty of opportunity and avenues for growth.
Redundancies and unemployment are lower than pre-pandemic levels (75.5%, 1.1% lower than December 2019) and open vacancies are still extremely high, with the demand for talent being a priority.
Regionally the North East is still headlining as a ‘tech hub’, a serious choice for growth and starting a digital business. This includes digitally skilled workers within vertical sectors that include technology, e-commerce, retail and finance. Nationally, 92,000 jobs have been created within these areas over the last quarter alone. During the last three years, we have seen a reduction of 750,000 private sector jobs, yet 350,000 have been created in technology, which is astounding. Tech investment is firmly expected to continue at record levels with aggressive recruitment plans being centric.
The problem is demand and supply, we need to see significant investment into learning and development (L&D) to facilitate the deployment of upskilling programs. It is simply not good enough to recruit staff that don’t exist. The technology sector plans to spend an average of £31,651 on L&D and £33,676 on recruitment. The former needs to increase, which will be key in creating a highly skilled workforce.
Of course, this is an issue not just in technology. With unemployment at its lowest for forty years and 1.2 million unfilled vacancies across the whole country, we face another issue of a shrinking workforce. That shrinkage (over 600,000 since the pandemic) has been attributed to many different causes including sickness (long-term covid is a real factor) and retirement, with many people opting to take earlier retirement than planned during and after the pandemic. LinkedIn data has indicated that 38% of those aged 50+ felt they would be disadvantaged because of their age. Furthermore, 26% feel like they lack the right skills. Additionally, LinkedIn data recently published shows that Baby Boomers (those aged 58-76) and Gen X (those aged 42-57) have lower confidence in getting/holding a job compared to younger generations. There is a wealth of talent in the workforce who have been left aside, a skills-based approach to hiring can overcome ageism by focusing on transferable skills. As we have learnt from the pandemic, flexible working practices can be mutually beneficial and are essential in engaging all talent pools.
Reiterating the need for flexibility as a benefit, we also see an increased demand for contractors and temporary workers. As skills shortages have become acute, businesses are paying more for contractors to help plug those gaps. This is reflective of an uncertain market ahead where businesses are less confident to commit to a permanent headcount.
In summary, the year ahead is highly unlikely to play out like the recession of 2008. The current shortage of staff in the North East is acute and will prevent the unemployment figures we saw fifteen years previously. There is lots of opportunity amongst the obvious negativity, I would expect a continuing high level of vacancies with continued low unemployment and redundancies.