Recruiters fear "skills gap" and extreme supply and demand imbalance
The number of job vacancies rose to a new record of 1,288,000 in the first quarter of 2022, data from the Office of National Statistics (ONS) has revealed.
In January to March 2022, the total number of available jobs increased by 50,200 from the previous quarter, with the largest rise in the sectors of human health and social work, which increased by 13,100 to a new record of 215,500 vacancies.
Although quarterly vacancy growth slowed across most industry sectors, the number of available jobs in this year’s first quarter are around 492,400 - more than the pre-pandemic level in January to March 2020.
ONS said the growth in vacancies over recent periods, alongside a reduction in the unemployment rate, has seen the ratio of unemployed people to every vacancy reach a record low of 1.0 in December 2021 to February 2022.
ONS’s Labour Force Survey also showed the employment rate is unchanged at 75.5% on the quarter, while the unemployment rate decreased by 0.2 percentage points to 3.8%. The number of full-time employees increased during the quarter, but this was offset by a decrease in part-time employees.
Growth in average total pay, including bonuses, was 5.4%, and growth in regular pay, excluding bonuses, was 4.0% from December 2021 to February 2022.
Meanwhile, the economic inactivity rate increased by 0.2 percentage points to 21.4% in December 2021 to February 2022. ONS said this increase was driven by those who are economically inactive because they are looking after family or a home, retired, or long-term sick.
Despite mostly encouraging numbers from the ONS reports, recruitment experts said there is “a gargantuan skills gap in the jobs market.”
“This is easily the most candidate-driven market we have ever experienced. The fight for talent is being won by the companies who have embraced flexible working, as people now want this as a rule,” Kieran Boyle, managing director at Gloucester-based CKB Recruitment, said.
“The firms who have stuck to wanting everyone in the office five days a week are really starting to struggle to attract the best talent, as well as retain it. Post-pandemic lifestyle changes have seen the amount of people already in a job looking elsewhere go through the roof,” he added.
Julia Kermode, founder of Nantwich-based IWork, agreed that employers’ restrictive approaches to job creation are effectively precluding thousands of qualified people from applying for vacancies.
“Now that we are moving post-pandemic, companies are reverting to type and are less inclined to offer flexible working, cutting out huge swathes of potential candidates, such as those with caring responsibilities, disabled people, those from disadvantaged backgrounds, part-timers, and many more,” Kermode said.
“It’s about time businesses recognise the value of attracting a diverse workforce as there are so many people who are willing and able to work, and who want to contribute to the economy, but don’t have the option to do so because far too many companies have legacy mindsets,” she pointed out.
Sarah Loates, of Derby-based Loates HR Consultancy, also underscored the importance of companies providing a certain amount of flexibility to job candidates.
“Candidates want the moon on a stick. Demand from employers remains obscenely high while supply is exceptionally low. If you can, always ensure you put flexibility front and centre, as this is rapidly becoming a deal-breaker for many candidates,” Loates said.
While other recruiters are thrilled at the number of job opportunities, they said the extreme lack of candidates also pose a different kind of potential problem.
“Employers are competing like crazy for the right candidates, driving salaries up into the stratosphere. With many businesses entering a potentially delicate period of post-pandemic recovery, this sort of situation is completely unsustainable,” Louise Burns, director of Tyne and Wear-based Nineteen Recruitment, said.
Sandra Wilson, director of Ipswich-based recruitment and HR firm Cottrell Moore, agreed with Burns that salaries in some sectors are pushed up to preposterous levels.
“The result is a situation that is simply unsustainable. The hope is that common sense will start to prevail, and that people will realise that compromises need to be made rather than outright demands,” she said.
“The jobs market is too vulnerable and facing far too many economic and geopolitical headwinds to continue on its current trajectory,” Wilson stressed.
