In early 2020, Frazer Jones published a blog titled ‘Why headhunting is going to be the only way to source skilled leadership’. At that point, the Office for National Statistics (ONS) reported a 3.8% unemployment rate in the UK, and recruiting top talent was becoming challenging. Little did I know that shortly after writing this blog, we would see a global pandemic that would change our worlds overnight.
Whilst many of us were working out how to navigate business during this time, few seemed to foresee the impact that this would have on the future hiring market. We were focussed on the short to medium term, with many organisations’ staff numbers changing based on business demands.
However, the current hiring market is now at its tightest in more than four decades. The ONS reported that the number of open jobs rose to a record high of 1.1m in the three months to August, which matched or exceeded pre-pandemic levels in all sectors.
The latest figures confirm that the UK jobs market is recovering strongly, as the boost from the easing of restrictions drove higher payroll employment. But record job vacancies confirm ongoing recruitment challenges across the employment market.
As a Director at Frazer Jones, a specialist HR recruitment and search firm, I’m having conversations daily with my network on this topic and the challenges in sourcing and enticing suitable candidates for their open roles.
Why is recruiting currently a challenge?
Across the UK, we are facing squeeze on labour supply due to the impact of both Brexit and Covid. Estimates state that there are almost a million people fewer in the employment market.
In recent years we have seen many people who had been living in the UK return to their home countries, and global travel restrictions mean a limited talent supply coming into the UK. This is alongside more people staying in education and others dropping out of the active workforce.
This is all happening at a time when the number of permanent HR opportunities has risen due to gaps created by the above or, for many businesses, growth through additional revenue streams that may not have existed pre pandemic. Ultimately, it has become a challenge of talent demand outstripping supply.
What does this mean if you are hiring?
In 2020, we saw the drive for many businesses towards direct hiring. In many scenarios, businesses were hiring fewer positions in a market with a 4.9% unemployment rate. In simple terms, we saw more candidates competing for a smaller number of roles.
Now, the opposite is true. According to recruitment software provider Broadbean Technology, businesses in the UK are contending with huge talent shortfalls as the number of people applying for jobs keeps falling, while vacancies continue on an upward trajectory.
We have already seen a significant decline in the number of immediately available candidates within the HR market. This presents businesses relying primarily on job applications with a challenge.
It doesn’t mean that businesses won’t be able to find candidates for vacancies, but it does mean that go-to-market approaches may need adjusting.
Why is there a shortage of talent?
From the middle of 2021, we swiftly saw the number of people moving into new positions increase as the market picked up. This burst in activity then led to a decrease in the number of candidates on the market; few of those who moved in mid-2021 will be looking to move again for some time.
All of this has also put pressure on the contracting market. There are fewer immediately available candidates and those that are, are in many instances looking at permanent positions as well as contracting roles. This is at the same time as changes in IR35 mean that, for some, working as an interim isn’t as appealing as it once was.
Some HR professionals are not open to move because they feel particularly engaged with their current organisation. This may be down to the way that the leadership teams dealt with the business and its employees during the pandemic, or being given additional flexibility in terms of agile working. These individuals are likely to have been employed during the pandemic and may have also been given increased responsibilities during this time, increasing their engagement and loyalty to their current employer.
We are in a market where recruiting is all about accessing and engaging with top talent. These engaged individuals often represent the best possible people that exist in the passive candidate pool. However, these will be the individuals that are vital to the success of an organisation and therefore will be in high demand, both in their current organisation and externally in the market place.
All of the above has tallied up with a significant increase in the number of organisations competing for internal recruiters in the market, meaning that many in-house recruitment teams are under resourced.
What do you need to do to recruit the best candidate?
The relatively small number of HR professionals actively looking for a new role are now in multiple processes, meaning that competition is rife to secure the chosen candidate. This has become a market in which headhunting is going to be the main way to source talent.
Successfully recruiting in this environment requires creating enticing prospects for potential candidates. This involves creating an engaging narrative and compelling career prospect, led by either internal recruiters or by external agency partners. It requires a seamless candidate experience at interview and throughout the recruitment journey, with pace and decisiveness throughout.
Partnering with external providers may help to drive your processes through more quickly. Many of us working within Frazer Jones have over 15 years’ experience in recruitment, meaning we have previous exposure to recruiting in recovery markets and bring hands-on experience of the challenges that this can bring in terms of hiring.
For over 25 years, Frazer Jones has interacted with HR professionals throughout their careers. In many instances we have established longstanding relationships with suitable candidates and are able to tap into these networks to fill vacancies at pace. Our reputation and longevity give us unparalleled access to these individuals which isn’t just an InMail through LinkedIn or relying on applications to job adverts.
With many organisations realigning their strategy as a result of the pandemic, it is about finding and enticing the right talent for today first and foremost, alongside identifying those with strong potential for future development.
Ultimately whilst headhunting talent is only part of the short-term solution, we know from our conversations with HR leaders that they are also going to be focusing on training and development as a crucial part of the puzzle. Providing a long-term solution to address the skills shortage, building the skills that they need from within and ensuring that UK business remains competitive in the global marketplace.