Podcast: Recruiting and retention in the current market
Over the last few months, the talent market has faced instability throughout, and businesses have struggled to predict what the future of the UK economy will look like. In the recent Recruiting Future podcast, host Matt Alder, and Totaljobs CEO Jon Wilson, both sit down to discuss how the recruitment climate has changed over the last three years and share their thoughts on how employers are continuing to thrive as the cost of living rises.
The current state of the market
With vacancies growing to record levels over the last 6 months, and fewer people actively looking for work, we see an increase in competition across all sectors, and 30% of businesses say skill shortages are a critical challenge for them. Businesses are looking for new ways to recruit and retain staff, over three quarters (79%) of UK employers recruited last quarter, despite this, the average time to hire increased by 12% from the previous quarter, highlighting a barrier from the right people.
The impact on the talent market
- Rising of living costs, combined with Covid-19 has prompted UK workers to consider early retirement, where they may not have previously.
- As a result of Brexit, we are also seeing less talent from Europe and worldwide relocating to or remaining in the UK.
- Entry level talent are opting to remain in education for longer, limiting younger talent pools.
Rising cost of living
The ONS recently put the UK’s inflation rate at 10.1% and both Citibank and the Resolution Foundation predict this will continue to rise, hitting over 18% in coming months. Although prices continue rise, almost half (48%) of workers say their pay has not increased as a result, meaning salaries are having to stretch further than before.
The impact high inflation has on workers
Over a third of UK workers are considering changing jobs to combat the effects of the rising cost of living within the next year. Shockingly, 17% have even taken on a second job to meet their costs.
Almost half of workers claimed they previously had limited disposable income and consider themselves to be living ‘payslip to payslip’. This worsened since Covid-19 and is further exacerbated as the cost of living continues to rise, especially as work-related costs have risen.
Recruitment and retention recommendations for employers
Employers are concerned about the rising cost of living (80%) due to their ability to retain staff, however, with nationwide skill shortages and record high vacancies recruitment is also proving challenging.
Although recruitment and retention are proving difficult for employers, there are a number of internal actions employers can do to ensure they are meeting the needs of their business while supporting their staff.
Advice for employers:
- Benchmarking salaries and offering appropriate remuneration packages in line with relevant market positioning.
- Allowing for transparent salaries, where possible to facilitate informed decisions for those looking to change jobs for financial reasons.
- Ensure that employees are confident and aware of an organisations approach to setting an appropriate remuneration package (salary and benefits).
- Include non-salary benefits, such as commute allowance or loans, free breakfast or lunch, employee assistance programmes to support stress and impact on wellbeing.
- Incorporate flexible working, different hours or locations could lift the burden of some costs such as childcare.
One thing we can all be really confident in is the competition to hire people will continue over the next six months. When you look at the forecasts for inflation – they range anywhere between 13% and 18%, over the next six to nine months. So, that really is going to impact actually what companies are able to afford to do. That’s going to continue to put pressure [on businesses] …We’ll continue to see competition; we’ll continue to need to see upward pressure on salary and benefits. And so, I can imagine the next six to eight months is going to be challenging for companies as well as for individuals looking for their next job.
Jon WilsonCEO at Totaljobs
Listen to the podcast for further details and insight into how you can retain and recruit staff during the rising cost of living
Download the report to learn more about our research insights and in-depth recommendations in ‘The Salary Squeeze: an employer’s guide to navigating the rising cost of living’.