Addressing skills shortages is a priority for many employers, Neil Carberry, Chief Executive of the Recruitment & Employment Confederation, explains how.

The past two years have been tumultuous for the world of work, to say the least. And the changes that the pandemic has driven have not yet played out fully – as the current supply chain crisis is showing. For everyone, this is a moment of concern, but also one that brings new opportunities.

For employers, it is certainly challenging. Official estimates show we have a record number of vacancies in the UK – 1.29 million in the first three months of 2022.

The REC’s own data shows that demand for staff is continuing to rise month-by-month. But labour supply has been falling. In the spring of this year, there were around 600,000 fewer people in work than there were before the pandemic, with many young people deciding to stay in education and older people hit by long-term sickness or stepping back to pursue other goals.

To my mind, these shortages have broken the model of the last two decades. And I don’t think this is a short-term trend.

While costs are rising across the board, and the economy has changed shape in the pandemic, there is more to it than these cyclical trends. Hybrid working, net zero adaptation and technological change are long-haul issues. As is the contraction of the domestic workforce, as the baby boomer generation retires.

From an employer’s point of view, therefore, the big decision is how to change what they do, if the old approach is becoming less and less effective in helping them access the key people they need and addressing skills shortages.

Addressing skills shortages

As the REC’s latest survey of hiring firms shows, the majority of employers are still looking to invest in their businesses and hire new staff.

That investment will be important for individuals, businesses and the economy at large. But in this climate, it is important that firms think carefully about the best way to fill their staffing needs before they go ahead with hiring as this is key to addressing skills shortages.

For some roles, that will be buying in workers in the middle of their careers, to take advantage of the experience they have built up over years. But firms will need to acknowledge that these workers may be rarer, and more expensive, than ever before.

For other roles, it will be about borrowing talented temporary staff to get the skills the business needs for a specific project or period of time, without committing to hiring someone permanently. This has always been a key strength of our labour market, and it is helping draw the sting of shortages at the moment.

Grown your own

But this is a triangle. The third question in addressing skills shortages is about what employers can grow. Many firms already think this way – but many more are being forced into addressing this question at long last.

Whether that’s students at the start of their careers, or reskilling older workers, this is a big chance for the UK to take a step forward with student employment, growth and opportunity.

In our industry, as recruiters, we are trying to drive this more strategic way of thinking about workforce planning. It will create new opportunities as firms realise, sooner rather than later, that the old model they were using is unsustainable in this tight decade.  

But to make it work, we must step up as businesses. Backing the training that is necessary when people join, and engaging earlier with schools, colleges and universities on early advice and experience. I know many of the recruitment businesses I work with have close links with local schools, allowing them to give advice to young people who are starting to think about their future job. And to profile recruitment as a career, as skills shortages affect us too!

I would encourage more businesses to do the same – by investing in those leaving study, we can all play a vital part in creating more opportunity and boosting the UK’s economic future.

Neil is a keynote speaker at this year’s ISE Student Recruitment Conference taking place 27 and 28 June 2022

Read more from ISE members about addressing skills shortages