Latest KPMG and REC research shows candidate availability drops to 26 year low
Companies are hiring, but candidate supply drops at record pace.
For those recruiters and organisations which follow the IHS Markit UK report on jobs, September’s report published yesterday, the 9th September 2021 makes stark reading.
Claire Warnes’, Head of Education, Skills and Productivity at KPMG, analysis of the situation sums it up very succinctly;
"Candidate shortages continue to plague businesses, who are all recruiting from the same pool of talent and struggling to fill gaps. While record high permanent placements and higher starting salaries mean it remains a job seekers market, recruiters and employers have seen the most severe decline of candidate availability in the survey’s history and will be thinking about how to attract and retain new staff.
This crisis isn’t going away, and the winding down of the furlough scheme at the end of September – while potentially bringing more job hunters to the market - could also add fuel to the labour shortage fire. Many businesses will have changed their business model during the pandemic, and so significant numbers of staff returning from furlough may need reskilling to rejoin the workforce in the same or another sector."
What makes this month’s report so worrying is that this is not a one-off. Since May this year, there has been a radical growth in the number of vacancies, with private sector permanent positions leading the way; 82% of those surveyed said that they were seeing growth in their own hiring.
This is confirmed by official ONS data, where the latest release shows 953,000 vacancies, an all time high and up 10% on the prior period.
Demand for workers is only one half of the story.
Supply of candidates to fill these vacancies is at the other extreme. The situation in August was ‘unprecedented’. The latest drop in candidate availability compounds the issue which has been developing since April. And this isn’t just a London or South-East problem, the North East of England recorded the steepest fall in candidate numbers.
Whilst this data describes the overall jobs market, the links and implications on those in the early talent space are clear. Our own data - gathered from GetMyFirstJob, employers and our TalentPortal platform shows an almost identical pattern.
Following the wide-spread opening of the economy and the significant pent up demand for a range of products and services, the growth of nearly 200% in total apprenticeship opportunities this year is substantial.
Data from over 210,000 applications shows an increase of 30% for the first 9 months of 2021 on the same period last year – not insignificant given that this is broadly the same size cohort as the previous year, but this pails into insignificance when compared to the demand for individuals to fill these roles.
In addition to apprenticeships, the rapid and extreme change in the labour market has had an impact on the ability of training providers and colleges to recruit for programmes such as Traineeships and Bootcamps. Volumes on the DWP Kickstart programme are also a victim of the market and a contributor to overall candidate shortage.
Even the largest employers, with the strongest employee value proposition are facing challenges too – this is a market in which everyone needs to consider their approach.
At our recent Employer Round Table a range of large organisations from multiple sectors, public and private reported significantly higher drop out rates prior to day #1. In many cases, candidates were able to collect multiple offers and then make a last minute decision about their employer of choice. Employers were left at the last minute with drop out rates of up to 30%, and in some cases 50% for internships or placement years.
This is far from a stable situation and the end of the Furlough scheme is likely to release some additional candidates into the overall market. It is also likely that with the end of the domestic holiday season and summer, the peak in seasonal labour will pass…. and then comes Christmas.
The long term impact of Brexit, Covid and growth in the overall economy remains to be seen. Rapid Government changes to loosen visa requirements in key sectors may also drive rapid changes in the market.
Until then, be very clear. The candidate is in the driving seat.
David Allison, CEO at GetMyFirstJob and TheTalentPeople