Skills shortages reach breaking point

Experts across the staffing sector will be all too familiar will the sector-wide skills gap impacting the UK. And with recent ONS statistics revealing that the number of job vacancies between March and May 2022 rose to a new record of 1,300,000, while the UK’s unemployment rate continued to fall, skills shortages are set to remain a concern for some time to come.

The UK’s labour market is reaching breaking point, and almost every sector is feeling the impact. The NHS recently reported being under as much pressure as they usually face in the winter, due to lack of staff, while those attempting to travel have been experiencing chaos at UK airports, fuelled by a lack of resources. Meanwhile, the financial services sector is also feeling the heat, and the Bank of England has responded to the sector’s hiring difficulties by splurging more than ￡200,000 on consultants to define its mission statement as it looks to tempt talent into the profession.

At APSCo, we exclusively represent recruitment consultancies operating in the professional sectors – and perhaps unsurprisingly given widespread news, our members are reporting that demand for white-collar applicants is extremely high. Our latest Recruitment Trends Snapshot gives a detailed overview of recent hiring trends, and yet again, we are seeing a month of spikes in vacancies with jobs up by 16% for permanent roles and up 19% for contract roles when comparing May 2022 to April 2022. The annual comparisons, however, revealed the biggest spikes, with contract vacancies increasing 34% between May 2021 and May 2022, while permanent roles grew by 25% year-on-year. Given that recent ONS figures revealed that, for the first time ever, vacancy levels were higher than unemployment rates and the latest data showed that unemployment rates are continuing to drop, it certainly makes sense that more businesses would turn to the flexible segment of the workforce as a quick solution to resourcing needs.

Despite the aforementioned spikes, the data, provided by the global leader in software for the staffing industry, Bullhorn, did indicate a slight dip towards the end of the month for permanent vacancies, which were down by 3%, while contract roles, only saw a 1% rise. However, this shouldn’t come as a shock as extended bank holidays and half-term periods predictably create dips in recruitment activity.

In today’s talent-short market, the professional staffing sector has a vital part to play in identifying and securing the talent that employers so desperately need. It seems that hiring organisations truly value the expertise of external talent acquisition specialists at this time too. High levels of hiring have translated into increases in annual sales revenue for our members, with placements seeing a yearly uptick of 44% in permanent placements. Encouragingly, this spike in placements and vacancy numbers is translating into an increase in sales revenue across both permanent and contract.

Our data strongly suggests that the skills shortages are continuing to drive demand for highly skilled contract professionals, with revenue from these placements up 28% between April and May 2022. While revenue from permanent placements saw a smaller monthly increase (16%), the year-on-year figures revealed a more significant growth, up 43%.

The UK’s labour market is clearly reaching a breaking point and this latest data highly suggests hiring demand is unlikely to slow anytime soon. For many months now, we’ve seen record-breaking vacancy numbers reported by the ONS and the first-ever instance where there are more jobs than people out of work. At a time when the market is so tight, it seems that businesses are really seeing the value that external recruiters can provide and will continue to heavily rely on them in the coming months.

In a post-Brexit and COVID-hit economy, the strength of the labour market will be paramount to the UK’s economic future. However, if this is to be achieved, legislative changes need to happen to ensure the recruitment sector can adequately access international skills to fill the gaps across the country. APSCo continues to lobby MP’s on this issue on behalf of the professional recruitment sector.

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