Dan Kirkpatrick, Director of JAM Performance Solutions, talks about the UK employment market – how it’s been in 2021 and how it’s going to be in 2022.
So, 12 months ago, I wrote that: “I think it’s fair to say 2020 has not gone according to anybody’s plan” – 12 months on I think it’s fair to say 2021 has not gone according to anybody’s ideal plan. I stress the word ideal in the previous sentence as, while nobody would have wanted 2021 to go as it has, the chaos and unknown of 2020 has been replaced (at least to some extent) in 2021, by planning and structure – the immediate macro example that comes to mind is the success of the vaccination programme that has enabled the return to some semblance of normality across much of the world.
Given everything that has happened in 2021 I thought it would be interesting to put together a short review of the UK recruitment market during 2021, which has faced a number of challenges throughout the year including Brexit, COVID-19, IR35 and talent shortages (often known as the war for talent). Many people more qualified than me have written about the effects of Brexit and COVID on the economy so I’ll focus more on IR35 and the war for talent.
Early in 2021, and after a delay of a year, IR35 (off-payroll working rules for clients, workers (contractors) and their intermediaries), was introduced to the private sector. There were doomsday predictions as to the effects the introduction would have (such as wiping out the contract market) and while it has certainly presented challenges to many companies, the doomsday scenarios that were initially foretold, have not come to fruition – recent research has shown that approximately two-thirds of contractors have been placed inside and one-third outside, so outside IR35 contracts do still exist.
War for talent
I predicted last year that there would be a war for talent during 2021 across a number of skillsets, especially within engineering and manufacturing. However, I can’t claim to be Nostradamus, as this was a very safe prediction, as there has been an ongoing war for talent for many years – although I note this year that it has moved into new sectors such as driving and hospitality. The war for talent has appeared even more serious in 2021, when compared to 2020, due to the significant increase in volume of companies recruiting.
I recently spoke to a software engineer who had nine interviews to attend (and turned down three others). Whilst most engineers don’t get this many interview requests when looking for work, it’s rare that they only have one interview. This means that any engineer that you are looking to recruit is likely to be interviewing at multiple other companies, so it’s so important that you have a great interview process. Remember that an interview is a two-way process and it’s not just about the interviewee proving to you that they’re right for you – you need to promote your business as the employer of choice for each interviewee.
Find out what’s important to them in a career and then advise how you can help them achieve what is important to them – remember that motivators are different for each person. Other ways of positioning your business to win this war include promoting your benefits and employer brand, offering competitive salaries and, where possible, hybrid working. Most importantly though (in my opinion) you should focus on keeping and developing the staff you have. Please get in touch if you’d like a copy of our ‘How to win the War for Talent’ one pager.
So on to 2022 and what that will bring for the UK employment market – alongside an ongoing and worsening war for talent I believe hybrid working/work from home may prove both a challenge and an opportunity for businesses during 2022.
I’ve spoken to a number of employers in the last few months who are having challenges getting their employees to return to the office/site, even if only for a couple of days per week. A compromise will need to be found and it is likely that both sides will need to give a little. One important factor for employers to note is that three of the top five results from a LinkedIn survey around what is important to employees, can be solved by allowing some level of work from home. Of those surveyed, 71% cited work/life balance as being important to them, 49% a convenient commute and 38% flexible work arrangements.
Could your work from home policy be a way that your company could stand out from the crowd when seeking new talent. To end on a positive note, it must be said that there have been many huge successes/votes of confidence within UK manufacturing during 2021 including, but most definitely not limited to, significant investments from multinational automotive and defence businesses, ever increasing green investment, and being at the forefront of robotic and battery technology.
All these successes are down to the businesses and technologies that we have in the UK – the most important element to all businesses is their employees. Therefore, to reiterate a point I made earlier, the best way of winning the war for talent is keeping and developing the employees you already have in your business.
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