In the space of 20 turbulent months the recruitment and retention rollercoaster has hit highs and lows, and ended up back where it started…
Predictions in the complex worlds of employment, Human Resources, and Employee Benefits are rather more difficult than many people might think or expect. Indeed it is a real rollercoaster of ups and downs sometimes.
And, if you doubt me, you need only revisit my Employer News contribution from February last year:
At the time of writing I – and indeed the entire UK business and political world – were perhaps rather too fixated on the uncertainties of the (at that stage) still undefined final Brexit that lurked at the end of 2020.
The recruitment rollercoaster
And a particular concern of that moment was whether there would be enough trained, qualified, and quality employment candidates to back-fill the potential loss of so many EU workers once the UK’s departure from the European Union was finally concluded. As a result many employers were wondering how they could improve their recruitment and retention appeal in such a competitive market.
Yet just a few weeks later and that concern appeared rather fatuous.
COVID-19 shook the UK’s economy, and a genuine new fear was that there would be potentially record levels of unemployment in the months ahead, and accordingly a vast new supply of quality candidates for those employers that had survived the pandemic to recruit from.
And that particular rollercoaster of emotion and fact has continued to fluctuate wildly ever since. And right now we appear to be, if anything, in a much more difficult recruitment market for employers than we were 20 months ago.
But words are cheap. Let’s look at a real-life example of how quickly the recruitment market has changed.
In June it was reported that a Michelin-starred restaurant in London was unable to open for lunch servings because of a shortage of staff. Yet the headline story is less important than the underlying facts. For the restaurant had advertised for a receptionist in November 2020 and received more than 300 responses. When the same role was re-advertised in May 2021 there were just 7 applicants.
And not one turned up for the interview!
And increasingly the national media are now reporting on closed businesses, reduced production, and empty supermarket shelves too.
Generically the problems are now being termed as “supply chain” issues. And in truth these issues are caused by a combination of factors, including COVID-19, the pingdemic, holiday season, unused leave, and Brexit.
Yet Brexit might be the defining factor here. Statisticians may never be entirely clear as to how many EU nationals have left the UK to return to the financial and emotional support network of their families during the pandemic, but estimates of around 1 million workers may not be far off the mark. And such a rapid migration of skills and talent clearly has consequences for the UK and it’s employers right now.
In July the national media began to report of “joining” bonuses being offered to new candidates in some sectors.
And in August it was reported that UK job vacancies had reached a record high, and this alongside the news from the Office for National Statistics (ONS) that average earnings are rising rapidly too, although at least some of this gain can be attributed to employees leaving the reduced pay of furlough and returning to their more usual working hours and pay.
Just a blip?
Yet this is all a million miles away from the expected – or indeed usual – position of an economy recovering from a devastating blow.
Unemployment during the 1980’s recession was nearly 12%, the 1990 recession around 10%, and after the credit-crunch earlier this century more than 8%. Yet here we are – after the biggest economic catastrophe in recorded history – with an unemployment rate of less than 5%, a level not that much higher than it was during the “war for talent” that was being experienced just prior to the pandemic.
And of course there may still be another major employment correction just ahead. The Coronavirus Job Retention Scheme is finally scheduled to end on the 30th September 2021, and the last available figures suggest that an astonishing 1.9 million people were still being supported by the scheme in June. At least some of those workers will sadly not have a job to return to post-pandemic, and there will also be some inevitable business failures in the months ahead too. So there will perhaps be a flood of new candidates to the recruitment market yet to come.
Yet those new candidates may need to retrain and acquire professional qualifications before they can help reduce the UKs current employee shortage. And even then there may be a significant delay until such workers can reach their optimum productivity (as evidenced by this research back in 2014).
So the reality is that many employers might well be facing a candidate shortage for at least the remainder of 2021. And with far fewer quality candidates currently available, the onus for most employers must surely rest on worker retention until some form of business normality returns.
So how can employers improve this key statistic?
A good initial step would be for Human Resources (HR) departments to remind line-managers of the business case for good employee retention.
Just as importantly HR departments should aim to equip line-managers with all the collateral and tools needed to reinforce that retention messages with employees. This should include a reminder of the benefits of continued employment, and an indication as to likely career progression prospects as well.
Lastly, but certainly not least, HR should highlight to line managers the potential risks for an employee in changing employer at this time.
The potential lessening of some employment rights in the first two years of a new employment is often not widely understood, and is perhaps far more important when the UK still faces the continued threat and uncertainty of another COVID-19 winter ahead.
And likewise a change of employer could result in the loss of cover provided by some really valuable (but often overlooked) Employee Benefits offerings.
The health-crisis of the last year has demonstrated just how important items such as Group Life Assurance, Group Income Protection and Group Private Medical Insurance are in protecting employees and their families, and even a short break in such cover can be rather worrying given the continued global pandemic and other health risks of the moment.
So the recruitment and retention rollercoaster has gone through highs and lows in the last 20 months, but like all such rides has eventually returned back to where it started. There will be plenty more thrills and spills ahead, but employers should always focus on retaining their best talent, and attracting good new candidates when available. And, if well communicated, Employee Benefits can play an important part of this journey.
Steve Herbert is Head of Benefits Strategy at Howden Employee Benefits & Wellbeing