It’s official, the current recruitment landscape is as challenging as it has ever been. We’re now established in a ‘pay-to-retain’ talent cycle against a backdrop of a fresh record high of job vacancies – the last official statistic was an astounding 1.3m.
We’ve done the research so you don’t need to Google the numbers and we’re sure your board meetings, weekly team meetings and status reports are dominated by this theme. The daunting fact is that wages are now lagging behind the cost of living when inflation is taken into account. In Q4 of 2021, according to ONS figures, pay fell by 0.8% on the previous year. In the 12 months to December, inflation was up by 5.4% with the Bank of England forecasting it could hit 7% this year. Some really challenging data which inevitably comes coupled with some tough decisions for your business.
Which is the main reason we’ve decided to reboot our Labour report in a bite-sized, easy to digest format that gives you pointers on what’s to come and how to adapt when it comes to sourcing your employees.
We know so many businesses have got a major headache in the staff retention department. Record vacancies mean workers are in the driving seat as employers want to keep their excellent people in place – so pay rises are not only expected but becoming more than routine.
This is costly for more reasons than the obvious, but what is certainly more costly is having to repeat this process month in month out as a result of a revolving door-system of colleagues. We’ve heard of colleagues at the lower end of the pay grade moving for 50p an hour increases, which on paper might sound bonkers, but in reality makes a whole lot of sense.
The simple fact is that the increased competition for labour isn’t going away. It is here to stay. What’s more, there’s never going to be a miracle cure for the headache of retraining and re-recruiting on repeat. It’s always going to cause your business pain and, we believe, will always cost you more than increasing pay rates.
So let’s add some positivity to this very dour picture before we all lose hope of brighter days! It really is not all doom and gloom despite the alarming headlines. The UK economy is continuing to create new jobs while many sectors such as science, finance and insurance and IT are already trailblazing with wage increases in a bid to dilute inflation and nurture happy employees.
There’s growth and opportunity in this turbulent marketplace. At Encore we specialise in listening to what our customers really, truly need before we start our process of finding the right people. We listen, then we chip in with our considered consultancy approach, then we listen again. And we keep on checking in and listening. Placing people is unlike any other service out there, because we know as well as you do that your people are what make your business tick. It’s crucial they feel valued and invested in.
Given the volatile mix of variables at play in the labour market today, we’re advising all of our customers take a moment to take stock of their goals as a business but most importantly as a collective of people. Practice listening yourselves, check in with your people and make sure to weave their feedback into the big decisions about moving your business forward as you grow through 2022.
Remember, attracting and retaining talent isn’t just about the pay rate but the full package on offer.