The skills shortage seems to be getting worse. Last week the Governor of the Bank of England urged those who have left the workforce to return to employment amid concerns that shortages are holding back Britain’s economic recovery while the latest jobs report from the Recruitment and Employment Confederation and KPMG reveals that permanent job placements rose at a record pace in August with the number of new vacancies down only slightly from July’s record high.
After previous economic crises there has been an increase in the use of temporary workers and self-employed contractors as companies seek to recover amid uncertainty. But with the temporary labour force facing the same issues as the permanent one, what can employers do to plug the gaps?
A recent Manpower event looked at the issues facing the contingent workforce and noted that many are similar to the challenges facing those seeking to fill permanent positions.
Spencer Pink, National Small and Midsize Business director at Manpower, pointed out that the UK is facing a 15-year high in terms of skills shortages, with other western countries also facing a talent shortage. 77% of UK employers say they are finding it difficult to fill vacancies amid changing demographics – more older and fewer working age people. This is leading to employers in stretched industries, such as logistics, raising wages by as much as 20%. Pink said he had heard of one logistics firm offering a 30% rise in wages for drivers. While there is estimated to be a 100,000 shortage of drivers in the UK, there is also estimated to be a 76,000 shortfall in nurses. The CBI has called for urgent short-term measures such as changes to immigration and apprenticeship rules and upskilling plans.
Pink said the skills shortage is likely to drive social tensions between those who have the skills employers are looking for and those who haven’t. However, many of those skills are not technical ones, which may be teachable, but soft skills such as the ability and desire to keep learning and resilience. Yet only a small proportion of employers are investing in soft skills, said Pink.
Employers are also seeing a quickening of the pace of digital transformation, which requires new skills [“every business is now a tech business,” said Pink], and employee demand for more flexible ways of working as well as career progression and a sense of purpose. Pink pointed out that, at the moment, more jobs are being created than eliminated, despite fears about the impact of digitalisation on jobs.
Pink said the new landscape means employers need to be more flexible, to focus more on workforce planning and to ensure they stand out. They need to sell potential candidates not just the job, he said, but training, vision, purpose and more. He cited figures showing up to 80% of workers under 25 are rethinking their careers after Covid and that 60% of workers generally are planning a change in their work life as a result of the pandemic.
Adam Hawas who leads Manpower and Calor Gas South West HR and Recruitment efforts, said those looking to hire temporary workers had to work harder to attract them in the current market by focusing on who they want to attract and how. The recruitment process needs to include people who do the job every day and perhaps a tour of the workplace to give potential workers a better insight into what they will encounter at work, he said. Being realistic is important to reduce churn. He works with Calor Gas in Wales and they have changed their recruitment process to lower staff turnover. When it comes to drivers, for instance, they invest a lot at the front end for temporary and permanent hires to support them to succeed and to avoid the cost of them dropping out. That means giving them a full understanding of what they will encounter and doing a thorough assessment of skills as well as two to three weeks of driving under a mentor.
Jerome Carroll, Academy Learning Developer at Manpower, spoke of the need to hire a diverse group of people and to build the skills needed for the future workforce – not just the role someone has, but the role that might be needed in the future. Hawas said it is important to assess the skills of the whole workforce, on hiring them as well as those who are already in the business, including soft skills, so the employer is better informed about what is available to them and how they can build on those skills. Calor Gas runs a ‘warehouse to wheels’ programme to upskill warehouse workers with the right skills so they can step in if there are driver shortages and potentially change full time to a driving position.
Hannah Sawitzki, a recruitment consultant at Manpower, said investing in upskilling also has the benefit of empowering, motivating and retaining the contingent workforce which is important as it costs 25% more to hire a person than to retain them. Hannah works on Manpower’s MyPath career development programme. She says the programme has helped convert temporary workers into permanent ones by identifying and building both confidence and skills, something that is vital considering how fast jobs are changing these days. She keeps in regular contact with workers on the programme and with employers who provide feedback which is used to award medals for achievement, including soft skills such as communications or learning.
Pink said employers would have to deal with the fact that some people who have been on furlough will not want to return at the end of this month and, more generally, with people now looking to move jobs much more than in the past. Investing in their workforce’s long-term future is good for attracting new people and for their own future.