Labour market: Stats and Realities
For the first time since records began, there are now more job vacancies than unemployed people in the UK, according to the Office for National Statistics’ (ONS) Labor market overview for May 2022.
Unemployment in the U.K has fallen to the lowest it’s been since 1974 at 3.7%. Conversely, the growing number of job vacancies are staggering, with the construction sector seeing a 78.8% rise in average vacancy numbers year-on-year, remaining below the economy’s average of 94.9%. This rising discrepancy is further evident in the average of 49,000 jobs in construction that were unfilled between February and April of this year. In addition, the industry witnessed the smallest recorded increase in payrolled employees between April 2021 and 2022, with a mere 3,000 people joining the field. These figures pale in comparison to 333,000 new employees that the accommodation and food service sectors gained.
A substantial number of skilled construction trade workers (400,000 according to the ONS) between the ages of 50 and 65 are set to retire within the next 15 years, and replacing them isn’t looking to be an easy task. A survey from YouGov revealed that just 3% of 18 to 24-year-olds have actively searched for a job in the construction industry, falling to 1% for female respondents of the survey.
Firms have been paying record bonuses to hire and retain staff, revealing an 82% year-on-year increase in weekly bonuses (via ONS). In all industries, however, recent figures reveal that regular pay (excluding bonuses) rose by 4.2% per year in the three months to March, meaning basic pay shrank in real terms, as CPI inflation hit 7% in March, and potentially reached 9% in April.
Total wages are failing to keep up with this growing inflation rate, as well as the rising cost of living. In addition, the skills shortage in the industry has been causing a ripple effect that has been impacting, not only salaries but the price and availability of materials as well, which is an entire impending crisis on its own.
Recruitment: Are You Hiring The Right Person?
When considering the current state of the construction job market, it’s become evident that the most skilled workers hold a lot of the power. With a mountain of vacancies to sift through, the top talent now have more flexibility when job searching and can take advantage of being ‘in demand’ to seek out the best benefits.
So when it comes to recruiting, companies need to ensure they can attract and retain the most skilled workers.
Hiring the right person for the job is a process that’s easier said than done, but hiring the wrong person has a cost that’s more than just financial.
Hiring the wrong talent can lead to:
- A decline in productivity due to a lack of skills or motivation can cause delays with projects and tasks, frustrating clients and staff alike.
- Doubt and confusion amongst the team, particularly if the new hire is in a leadership role and cannot lead the team effectively.
- A decline in employee morale as existing staff may have to take on additional work due to incompetence or high turnover rates, as well as not getting the necessary attention from management due to a new hire requiring extra assistance.
- The potential for brand credibility to take a hit from a client perspective due to poor service or a negative interaction with an ill-equipped new hire.
And the list goes on, that’s why making an investment in a good recruitment agency is invaluable for a company that wants the best out of an applicant and future employee. As Gement, we provide a no-frills, no-nonsense recruitment service, and pledge to always act in your best interest.
If you’re having trouble securing candidates, we want to give you some tips to ensure your success. The recruitment process can often end up being long and tedious, but it surely doesn’t have to be.
Expediting the Process and Gement’s Tips on How to Do It
1. Shorter Interview processes
Now, more than ever before, there’s one factor that can make or break a company’s chances with a potential new hire: Time.
Research from HR Magazine reveals:
- Half of all UK professionals have declined a job offer because the hiring process was too long.
- 65% of employers globally have lost their preferred candidate due to a lengthy hiring process
Streamline your interview process to engage as many applicants as possible. For faster results, you’ll need to make faster decisions.
For blue-collar roles, Gement recommends a one-stage face-to-face interview to give employers the chance to get to know the person behind the CV. With the considerable amount of vacancies the construction industry has been experiencing for the past year, these are the sort of roles that applicants – frustrated by a tedious interview process – will begin to look elsewhere to fulfill.
Research from our employers have found that a two-stage interview process is an effective way to assess candidates for white-collar roles. Telephone interviews work great as a pre-screening to assess suitability before an in-person follow-up, whilst one face-to-face meeting helps to reinforce (or disprove!) perceptions about a candidate, and to gain better perspective on how they would fit into your company.
2. Unbeatable Benefits
The tides have turned over to a candidate-driven job market, and the best candidates are juggling multiple offers before committing to any single one. To snag them before the competition, they’ll need the right set of incentives to keep them interested – and this means more than just a decent salary.
A survey by Glassdoor reveals that 79% of employees would value new or added benefits over a pay increase.
This demonstrates the importance that an unbeatable compensation package has to an applicant when considering different job offers: People love perks!
To appeal to top talent, companies will gain a competitive advantage with exceptional benefits including any of the following:
- Paid holiday, vacation, and sick days
- Medical, dental, and vision insurance
- Pension scheme
- Professional development training
- Flexible hours/ Work from home arrangements
- Gym membership
- Cycle to Work scheme
- Free food and drink
3. Competitive pay
One thing is certain: The best candidates will always be drawn to more desirable salaries, and since today’s job market is increasingly candidate-driven, companies must consider the value of what they’re offering in order to stand out amongst the competition.
Going a notch (or two) above market-related pay is a safe bet to attract attention to job postings. Sufficient pay demonstrates respect for employees and their skills, inspiring loyalty and boosting morale.
In addition, better pay is proven to reduce employee turnover and expenses, as poorly paid employees may always have one foot out the door in search of a better opportunity.
This classic tactic is easier said than done, and it’s not always a feasible option for some companies. The good news is that this is workable with other value added benefits and non-monetary compensation. We find it best for companies to be flexible with tailoring and fine-tuning their approach to get the most out of their recruitment process.
If you’re looking to recruit, get in contact with Gement and have a chat with one of our specialist recruitment consultants. Standard fees start at 10%.
Contact us at firstname.lastname@example.org.