A high-quality workforce is the lifeblood of an organisation. Yet businesses across the UK are currently experiencing a talent crisis. If your company is having difficulty recruiting staff, what can you do to overcome the skills shortage? Here we share some ideas.
What’s the skills shortage problem?
According to the Office for National Statistics the number of job vacancies in the UK rose to a record 1,300,000 in February to January 2022. That’s an increase of 20,000 compared to the previous three months.
In January to March 2022, for the first time, the number of vacancies was greater than the number of people looking for jobs. Over this period, there was a ratio of one person for every vacancy advertised.
Why is there a labour shortage in the UK?
There are a few reasons for the labour shortage, including Brexit. In 2020, around 146,000 EU nationals left the country. This led to labour shortages, such as the HGV driver crisis and vacancies in the healthcare sector.
The pandemic also saw a significant increase in people retiring early. This may have been for health reasons or simply a reassessment of priorities.
On top of this, there is an expanding chasm. This chasm lies between the skills required by employers to fill new jobs and the number of people with the skills to fill them. For example, The Digital Economy and Society Index found that 4 in 10 adults don’t have basic digital skills.
Why do organisations need to overcome the skills gap?
The skills gap is costing the UK at least £4.4 billion. This is because of the high cost of recruiting and training new staff. Then there are the wages for temporary staff employed to fill gaps, plus the higher salaries needed to compete for talent.
According to the Open University Business Barometer, 70% of business leaders say that recruitment is taking longer and costing 33% more. The report also found that the long process of recruiting new employees is costing UK businesses £1.6 billion.
The Learning and Work Institute has predicted that the talent shortage will cost the UK economy £120 billion by 2030. This is because there will be a shortage of 2.5 million highly skilled workers.
In summary, the skills shortage is a huge drain on financial resources. So overcoming this skills shortage is a real must for organisations from a financial perspective.
Not having the skills needed restricts business growth
When an organisation can’t secure talent, there’s a negative impact on productivity and business growth slows. Existing employees may experience intolerable levels of stress because they’re doing the work of several people.
In a high-stress environment, mistakes happen. Systems become inefficient and staff take days off sick or leave the business altogether, so the situation gets worse.
The skills shortage also makes it harder for UK companies to compete with international firms. This is especially true for companies lacking sector-specific skills. Sectors suffering the greatest impact of the talent shortage include construction, engineering, healthcare, hospitality, IT, leisure, and science.
Four ways to overcome the skills shortage
Every organisation needs to build a resilient workforce with the skills to adapt to new situations, generate innovative ideas, and drive the business forward.
If your current recruitment strategies aren’t attracting enough of the right people, then it’s worth trying a fresh approach. Here are some possibilities to explore:
1. Investing in your existing employees has a two-fold benefit
Training employees can be a successful means to overcome the skills shortage in your organisation. Training can be external, but it can also be in-house through a mentoring scheme, for instance.
It’s likely to be more cost-effective to nurture the potential of existing employees than to recruit new staff. For small businesses, finding the time and money to train staff can be tricky. But sourcing funding for training can be a brilliant investment of time and potentially highly worthwhile in the long term.
According to Totaljobs, 8 out of 10 employers found their employees’ output improved after training. As well as this, investing in continuous professional development boosts employee morale and engagement.
Providing training to employees can also be helpful for retention. Two in three employees in the UK have left their jobs due to lack of investment in their professional development.
So, upskilling employees and instilling a learning culture supports employee retention. This has a positive impact on productivity.
2. Fill your talent pipeline by offering T Level placements
T Levels were introduced in 2020 and they have equal status to A Levels. They’re an industry-specific vocational qualification designed to fill the skills gaps in certain industries.
As part of the T Level qualification, students spend a year working in the relevant industry where they gain real-world experience. This hands-on experience is invaluable for employers. Our guide to T Levels for employers goes into more detail about the benefits of engaging with T Level students.
Your business could also consider taking on apprentices. Apprenticeships are a cost-effective way to train young talent with the skills a particular business needs. At the same time, apprenticeships are an investment in the future workforce of your industry. The Government offers financial help to companies that employ apprentices.
3. Think creatively to increase your talent pool
Flexible working has really become a priority for people since the pandemic. A survey by Perkbox of 1,532 employees revealed that 40% wanted flexible working hours.
If your organisation offers over and beyond the normal level of flexibility, you can tap into talent that you might not otherwise have access to. This can be a smart way to overcome the skills shortage.
Entice people into your organisation by offering greater flexibility
You might consider options such as offering a job on a part-time or job-share basis. You could think about offering annualised hours (hours aren’t calculated on a daily or weekly basis but over a year). This gives employees the opportunity to organise their work around their private life.
You don’t need to employ people to get the skills you need
More than a million people over retirement age are currently working part time or as consultants. This slice of the workforce has many years of valuable experience to bring to the workplace and can be a great way to overcome the skills shortage in an organisation.
Gig economy workers can also provide much-needed skills and they’re sometimes brought in by companies to train employees. Research by Totaljobs found that most businesses believe contractors are more productive than permanent staff.
4. Reflect on the rewards and benefits you offer
The cost-of-living crisis means that employees’ financial wellbeing has never been at greater risk. Consequently, organisations should consider employee benefits that promote financial wellness among its workforce.
By offering the best possible benefits package, you can use this to attract the talent you need. The right package can also improve employee retention, too.
According to a study by Metlife, 69% of employees say they’d feel more loyal to an employer offering a greater choice of benefits. This makes sense because people live very different lives. A young person living in a shared house wouldn’t be interested in childcare vouchers, yet an experienced employee might be more interested in health benefits.
If you offer a great package of benefits, make sure candidates and prospective employees know about them. Mentioning key benefits in your job adverts can be a great way to increase the number of applicants.
Discover on-demand pay from Openwage
On-demand pay from Openwage allows employees to instantly access their earnings at any time in the month, 24/7. Simply being able to tap into wages when employees need to can significantly reduce financial worries. This allows them to be more present and productive at work.
Offered as part of your benefits package, on-demand pay can help you overcome the skills shortage by attracting more talent to your organisation. What’s more, Openwage is completely free for employers.
To find out more about Openwage on-demand pay, head over to our Employers’ page.