In midst of skills crisis, employers must completely re-think recruitment strategy
Bill Richards, UK managing director at Indeed, comments on the current skills shortage:
The number of people in work in the UK rose by 205,000 to 31.42m in the final quarter of last year, according to the latest data from the Office for National Statistics (ONS). This has been heralded as a success for the UK economy and proof that the UK is heading towards its goal of ‘full employment’. While this is great news for jobseekers, as the market for top talent grows increasingly competitive, employers are struggling to find the right candidates for their roles.
Our recent Hiring Lab report: “Uncovering the Causes of Global Jobs Mismatch” discovered that this disconnect between skills and job vacancies is being felt strongest within high-skilled professions across both the public and private sector – including nursing, teaching and technology roles such as software development. The report set out to spotlight some of the systemic barriers to talent attraction, and we’ve uncovered some interesting findings in the UK.
30% of UK jobs are left chronically unfilled, meaning there are still open after 60 days of the first posting. Long vacancies are a drain not only on the company, but to the wider economy. Working with CEBR (Centre for Economics and Business Research), we calculated that these empty desks amount to a staggering annual cost of over £18bn to the UK economy.
Gaps such as these - whereby the job openings are there, but the employee interest isn’t - are often blamed on poor wages. This has certainly been the case amongst the nursing and teaching professions, both of which recently suffered well-publicised pay cuts. The average nurse salary is £21k. Meanwhile, a consortium of six teaching associations, collaboratively known as NASUWT cautions that the 1% cap enforced on teachers' pay over the last five years is putting off newcomers to the profession.
It is important to note that salaries are just one of the many factors that jobseekers consider when looking at new roles. If corporations are to overcome the rising skill shortage, they will have to address more than solely staff pay packets. The tech sector perfectly exemplifies the struggle that occurs when wages are used as the core bargaining tool to lure in the best talent. While this can be an effective quick-fix, it is certainly not a long-term solution to systemic skills shortages.
Companies in the tech industry have suffered a particular shortage in developers with Java skills – the most commonly used coding language. As a result, many have boosted the salaries on offer to such candidates. Indeed’s data uncovers that the average role for skilled Java workers offers a salary of approximately £60,000 – more than double the average salary of any other open position across all industries, which stands at £26,600.
Despite throwing money at the issue, the impact is negligible. The industry has become fiercely competitive with increasing salaries - and yet the number of worldwide job postings calling for Java skills is still five times greater than the share of searches for roles that require this skill.
Indeed’s inaugural ‘Job Happiness Index’ has provided us with further insight into who’s happiest, in which roles and in which locations, whilst also identifying the contributing factors. The index is compiled using data from Indeed Company Pages, which hosts over 10m employee reviews. Here, current and former employees assign their companies an overall ranking from one to five stars, and also rate them individually by five additional measures: management, job security and advancement, culture, work-life balance and salary/benefits.
Globally, we see a huge trend that job satisfaction is most strongly correlated with the scores employees leave for work-life balance. Least important here is salary and benefits - which we know act as an important talent attraction tool - but work less well for retention. Crucially, employers must now consider what will entice employees beyond a wage increase. Salaries can be raised anywhere, but the company’s culture and environment is completely unique. Feeling discouraged or insecure in a job is one of the most common reasons employees give for considering a job change, alongside failure to receive recognition for a specific accomplishment at work. Flexible and remote working is another key priority for the most in-demand employees – and is consequently something talent heads and employers should take on board when hiring.
While incentivising staff can play a part in luring the best talent, the truth is that no amount of money, or number of employee initiatives is going to address the core issue: there just aren’t enough skilled workers to fulfil demand in a number of industries. And getting people into education isn’t the issue either – tertiary education attainment is the highest it’s ever been at over 45%, according to the Formal Education Score. As such, corporations need to take matters into their own hands to provide employees with the skills they need.
Rather than solely seeking out jobseekers with the precise skills to fill the role, skills shortages such as this call for a more flexible approach to hiring. When employers struggle to source candidates with the specific skills or qualifications required, they need to be open to candidates that fit the bill in terms of culture, experience and willingness to learn. This approach requires investment in targeted training programmes to enable employees to gain specific qualifications while on the job. In a tight labour market, addressing barriers to education and self-advancement is a more valuable investment than outbidding competitors.
Employers developing retention strategies can be guided by our data, which proves that long-term employee loyalty can be won with robust policies around work-life balance, meaningful work and company culture.