Power to the People: How Employers Can Adapt Their Hiring Strategy In A Labour Shortage

Some have coined it the Forever Labour Shortage. While we can’t say exactly whether it will be forever or not, it’s true that the UK is currently facing a labour shortage. Last year, there were fewer unemployed people than job vacancies – the first time that has happened since records began.

Now, as anyone who understand the laws of supply vs demand will have gathered, this puts employees in a new position of power. Employees are the ones in demand and competition for the best employees is at an all-time high. Companies are now having work harder to make their workplace a desirable option for candidates.

Line graph showing how many job vacancies and unemployed people there have been in the UK from 2001 to 2022. You can see that in 2022, the number of vacancies out number the number of unemployed people for the first time since records began.

We have a few suggestions on how your company can adapt your recruitment strategy.

But first, we need to understand how we got here…

What Has Caused the UK Labour Shortage?

A labour shortage is a complicated issue which likely has many contributing factors. However, the main suspects include an aging workforce entering retirement, long-term sickness from the COVID-19 pandemic, low immigration rates, and fewer people having babies. Let’s explore this in more detail.

After WWII, we had the baby boom. The boomer generation grew up and entered the workforce, creating a large labour pool for employers to draw from. Companies didn’t have to cater to employee demands. If someone left, they could easily be replaced.

However, the boomers didn’t have so many children themselves. Society went from having 2.98 babies per woman in 1964, to only 1.58 babies per woman in 2021. So, the workforce pool stopped expanding as rapidly.

Four icons demonstrating the four main factors that are contributing to the UK's Labour Shortage; fewer babies, immigration restrictions, early retirements, and long-term sickness

For a time, immigration rates were high and could supply the labour pool instead. Also, women started entering the workforce. But the number of working women hit is peak in 2000, and anti-immigration policies have hampered worker supply in recent years. Thinktanks estimate that the UK has lost 330,000 workers as a result of Brexit.

On top of all of that, the Covid-19 pandemic has left many workers on long-term sick leave and encouraged many of those boomers to take early retirement.

So, what are employers to do with this diminishing labour pool? How can companies adapt their recruitment strategy to ensure they get the talent they need?

How to Hire During a Labour Shortage

A sign in a shop window saying

1.    Upskill your existing employees

Start by working with what you have. Conduct a skills gap analysis to identify what skills your company is lacking right now. Then, see if you can invest in training to fills those gaps, rather than looking to hire somebody new. You never know, some of your staff might be very interested in moving into an adjacent field, one that you need, but just haven’t had the support they needed until now.

This investment will also help to make your employees feel more valued, especially if the training leads to internal promotions.

2.    Promote company culture

Studies suggest that current job seekers are highly motivated by company ethics and workplace culture. If you don’t know what your company culture is, now might be the time to figure that out. Once you do, make sure everybody knows about it. Not just your existing team (although this will make them more likely to recommend you as a positive workplace), but also prospective employees too. Use social media and press to highlight what you stand for and how you look after your employees.

3.    Offer better benefits (think beyond money)

Speaking of looking after your employees – is this something you think about much? Companies have been able to get away with minimal benefits for a long time but if you want the best talent, you have to offer them something they can’t get elsewhere. Better salaries are a start, but how about flexible work arrangements? An onsite gym? Or access the mental health support?

This also has the added bonus of helping you to retain current staff. If there’s one thing you don’t want to do in a labour shortage, it’s lose the staff you already have! So, talk to your team and find out what would mean the most to them. That’ll give you a good idea of what your ideal candidate would like, too.

A woman working out in an office gym.

4.    Look into specialist recruiters

With a diminishing pool of potential candidates, there are only going to be a few exceptional options and you do not want to miss them. Specialist recruiters have their nose to the ground in exactly the area you are looking for. They have contacts across the sector that they can draw upon, and they are in a unique position to understand what attracts candidates to certain vacancies.

Instead of simply advertising your role and hoping for the best, recruiters can actively search for candidates and bring them to you.

Are you looking for support with your recruitment strategy? Our team recruit across eight specialist disciplines, connecting you to the best talent in your industry. Call today for a chat about how we can help you on 01709 723 248.

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