Omni is a proud partner of the CIPD, working closely with the institute to produce the annual Resourcing and Talent Planning Survey, now in its twenty-second year.
This month, Louise spoke to Senior Policy Adviser for the CIPD, Gerwyn Davies, to get his insights into the future jobs market and the so-called ‘Great Resignation’, a widely reported phenomenon that workers are quitting their jobs en masse.
Gerwyn leads the CIPD’s research output, commentary and engagement on labour market issues and has published reports on atypical work, the future of work and the National Living Wage. These reports have led to new legislation and have made the headlines in national print and broadcast media, with mentions for the CIPD in government consultation documents and official reports, including the Bank of England’s quarterly Monetary Policy Report.
Thanks for speaking to us, Gerwyn. How severe are current skills shortages in the UK?
As various reports confirm, growth in recruitment is gathering pace across multiple sectors. While there are signals in the economy that this could start to plateau, it shows no signs of slowing down in the short term.
A considerable driver is a decline in access to EU nationals, older workers and students, which has led to a shortage of blue-collar workers in a broad range of sectors. According to the ONS, there are currently shortages in 15 of its 18 sector categories, highlighting the seriousness of the situation.
What are organisations doing about it?
Some businesses, particularly those in hospitality, have been forced to scale back their operations by implementing reduced opening hours or even closing parts of their buildings. To help overcome the issue, the first response from employers has been to raise wages, which has gone some way in garnering interest from job seekers who may have missed out on the opportunity to earn more for similar roles in the past.
However, most employers recognise it requires more and are working to improve job quality. Offering flexible working options can attract previously untapped talent, such as parent returners and older workers who had perhaps once felt pushed out of employment due to a lack of flexibility. Currently, the number of older workers leaving work is historically high, and employers are finally starting to take action to retain these valuable skills.
Is there validity to reports of ‘the great resignation’?
According to November ONS figures, job-to-job moves reached a record high of 979,000 between July and September, with statisticians finding resignations rather than dismissals had driven this increase. Such data suggest that workers feel more empowered than ever to leave their jobs for new opportunities.
There is some evidence that the end of the furlough scheme brought about transfers between sectors and roles. However, many furloughed roles were at the lower end of the skills spectrum, meaning employees were limited as to which sectors they could move into.
Industry professionals are concerned that the significant hike in job moves will only increase as migration restrictions continue. Multiple sectors, like transport and hospitality, have been dependent on employees who have migrated from the EU for more than two decades, and the restrictions resulting from Brexit and the pandemic have caused ongoing issues.
These sectors have seen the biggest movement in activity when it comes to increasing wages and offering additional benefits to attract workers. The skills shortages have forced them to become more proactive when sourcing labour, rather than simply relying on agencies to do the heavy lifting. We have seen them start exploring different recruitment channels and tapping into a broader demographic so they no longer have to rely on overseas talent.
Such a shift has meant employers have become more inclusive, with diversity & inclusion (D&I) a huge focus for many HR functions. That being said, this evolution is largely down to the size of the business rather than the sector it is in. Smaller organisations with fewer resources are not widely adopting these new practices, signalling that progress still needs to be made.
One under-reported, but highly related, cause of skills shortages is the disruption to apprenticeship and training activity due to the pandemic. Right now, there is less support out there for job seekers and employees to upskill and retain. While this is starting to change, progress is slow.
Do you have any predictions for 2022 and beyond?
It’s difficult to forecast anything due to ongoing uncertainty across all markets. Labour and skills shortages extend globally. In fact, the UK is fairing slightly better than countries like Italy and Germany right now.
Given the UK’s reliance on immigration, travel restrictions and closed borders will remain a challenge. Without action to appeal to new groups of workers, labour and skills shortages are likely to become a permanent issue due to the demographics of the UK workforce and the growing number of older people leaving work.
The vast majority of employment growth comes from high-skilled jobs. However, with education not rising in line with this, more employers will need to look overseas to fill these roles, too.
It is clear that businesses should invest in training. Apprenticeships provide a golden opportunity for employers across all sectors to drive skill development and retain valuable talent. The government should seize this opportunity to assist more young people and SMEs.
Education is an overarching issue, and the number of students leaving education and entering the workplace is still not enough to backfill skilled roles. Furthermore, the UK does not have a great track record for matching graduate skills to jobs, providing another strong argument for expanding apprenticeship activity.
I would also like to see the government extend its Kickstart Scheme into next year, which provides funding to employers to create jobs for 16 to 24-year-olds on Universal Credit. Participants of the scheme have been nothing but positive about it, and it gives employers a unique opportunity to grow skills in areas currently lacking.
Without such action, there is a big concern that recruitment difficulties at current levels will persist.
The CIPD Resourcing and Talent Planning survey, developed in partnership with Omni, examines resourcing practices and the challenges organisations face to provide people professionals and their organisations with benchmarking data on critical areas such as recruitment costs, employee turnover and retention. Omni can support your business with a range of these challenges – to find out more get in touch with our team.