The UK Has a Skills Issue
Welcome back to the Recruitonomics Newsletter! This week, we’re looking at the skills gap in the United Kingdom and its impact on recruiters.?
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This Week on Recruitonomics:
Is the Skills Gap Getting Worse in the UK??
The U.K. labor market remains very tight because of various economic shocks that have negatively affected labor supply. The economy has faced the economic and health shock of COVID-19, Brexit’s immigration-shrinking policies, and an aging workforce. Consequently, the gap between labor demand and supply has narrowed substantially over the last decade. As that gap shrunk and the labor market tightened, employers have found it increasingly difficult to find and hire skilled workers. Data from the U.K.’s Employer Skills Survey shows that the number of companies with at least one hard-to-fill vacancy – those where employers report difficulties filling the role – has increased from 4% in 2011 to 15% in 2022. While this data is lagged (the U.K. government only releases it on a two year basis), it speaks to the difficulties that recruiters have been feeling for the past several years. There have been a low number of applicants with the required skills, competition from other employers, among other barriers to hiring. The incidence of skill-shortage vacancies has risen from about 16% of all open positions in 2011 to about 36% as of 2022, indicating the severity of the problem that recruiters face finding the right talent.?
Read the full article here.
What does this mean for recruiters??
The answer to the skills gap problem that recruiters currently face is pushing for more upskilling at their companies. Upskilling is key for keeping workforces up to date with new technologies and is also an attractive benefit to many job seekers.
Recruiting Tips:?
Register for the September Edition of the Appcast Brief! Andrew Flowers, Chief Economist at Appcast, and Julius Probst, PhD, Labor Economist at Appcast, will be breaking down the latest August jobs report and the general state of the economy. Join us on September 6 at 10 a.m. ET, and bring your questions to the conversation!?
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Back in 2020, the United States labor market was turned upside down by the COVID-19 pandemic. Overnight, millions of workers found themselves unemployed with very few employment opportunities. Over in Europe, governments depended more on furlough schemes, keeping workers “on the sidelines,” so to speak, until the worst of the pandemic was over. While this seemed like a kinder fate at the time, the United States’ path led to an incredible amount of worker churn, which in fact may have transformed the productivity potential in the country. During the recovery, workers quickly shifted away from hospitality and retail, two sectors heavily impacted by the lockdowns, and onto higher paying opportunities now open to them as demand in white-collar sectors soared. That worker churn may have actually led to the current productivity boom in the United States. When moving to a new job, individual productivity typically follows a pattern of initial decline followed by an eventual increase due to the learning curve. Productivity growth across the United States followed a similar pattern, with productivity plunging throughout 2021 and 2022 and now accelerating again.?
Read the full article here.
What Recruitonomics is Reading:
While the U.S. labor market has cooled considerably, companies continue to struggle with finding correctly skilled talent. Finding qualified applicants can prolong the hiring process, eating into a recruitment budget. Companies continue to search for top talent among external candidates, but the untapped potential of their existing employees may be a better place to look. Allocating money to upskilling employees may be the answer to the skills gap in the U.S., as this article from Fortune explores.
More Data & Insights:
Thank you for reading! Stay tuned for next week's Recruitonomics Newsletter and check out Recruitonomics.com for more data-driven insights.