Recently released ONS figures showed that UK unemployment is now at 4.6%, the lowest level since 1975. At the same time, the Open University Business Barometer stated that almost 90% of the 400 businesses surveyed struggled to recruit workers with the right skills over the last 12 months, whilst 58% believed that skills shortages have damaged their firms. The survey suggested that the problem was costing companies more than £2bn a year. The results also found that people already in work were more reluctant to move employer and, as a result, salaries offered were being inflated and recruitment processes (for 75% of those surveyed) were taking much longer (an average of one month and 24 days longer than normal). Firms are therefore increasing their use of temporary workers as a result.
Data from the Markit/REC Report on Jobs (June 2017), suggested that demand for permanent staff rose sharply in June and growth in hourly pay rates reached a record high. Recent APSCo findings state that there were 4.8% more HR vacancies advertised in the 12 months to 31/3/17, compared to the previous 12 months. Interestingly, March 2017 was 9% higher than March 2016 and it appears, based on our own data, that the trend is continuing.
July was a record net fee income (NFI) month for Oakleaf, 11% higher than our previous record. Year on year, our total live vacancies are up 35% and, comparing the first two trading months of this financial year versus the second two, new mandates are up 37% and the trend is continuing, with a strong pipeline of revenue already booked.
We are also experiencing a noticeable increase in time to hire, resulting in some firms losing their preferred candidate, as well as some candidates receiving multiple offers. The latter is a phenomenon we haven’t witnessed since pre-recession. In the same vein, we are also seeing a re-emergence of candidate “buy backs”. Across our business, we have had 13 year-to-date. Traditionally, this was based on a candidate receiving a compelling financial up-lift to stay with their current employer. Interestingly, 5 of our 13 buy-backs were non-financially based – candidates were instead offered flexible working as a retention tool. This is, in my experience, a brand-new phenomenon and almost certainly reflects the changing attitudes to work. Research published by Ten2Two in July (Flexible Working Research Survey) found that 91% of employers feel that attitudes to flexible working are more positive than 10 years ago but only 29% felt there had been ‘significant’ improvement. Perhaps it’s time for employers to recognise that workers are now placing far greater importance of the ability to work flexibly and, if they don’t offer or encourage it already, then perhaps they should think again. This is, most certainly, a candidate driven HR market.