The latest KPMG and REC, UK Report on Jobs was published today, 8th October 2021. The trends that started following the opening of the economy post-lockdown have continued, with little sign of the situation easing for employers.
This prolonged period of imbalance between demand for workers and availability of candidates has led to the most obvious economic conclusion – starting pay has hit a record high.
Claire Warnes, Head of Education, Skills and Productivity at KPMG UK said:
“This month’s unprecedented increase in starting salaries – the highest in 24 years – is being driven by the near record fall in candidate availability. While higher salaries are good for job seekers, wage growth alone is unlikely to help sustain economic recovery because of limited levers to bring people with the right skills to where the jobs are and increase productivity.
Whilst the finish of the furlough scheme at the end of September may bring more candidates to the jobs market, many are questioning the match between the skills and experience they have, and current demand.
When looking at the early talent market, we can see two specific scenarios playing out simultaneously.
The first is the most obvious. Organisations who have traditionally relied on the Apprentice Minimum Wage to provide cheap labour in their organisations are struggling to attract the same number of candidates as historic levels. Frankly, the £4.30 minimum wage does not work economically given increases to travel and other living costs.
Secondly, even large employers are not insulated from the situation. At our recent RoundTable, large employers reported that this year’s intake of apprentices, graduates and interns have all shown the highest level of reneges they have ever seen; in some cases, 30% of young people dropping out immediately before their start day. In these cases, the most in demand candidates are able to gather a selection of offers and then make a final decision.
The implications are clear…
1. Salaries have to be competitive
we are operating in an environment of severe limitation of candidates, so if you want to attract a range of candidates who will stick with you, understand your local market. Data from GetMyFirstJob.co.uk shows that in September, only 3% of vacancies paid more than £8 per hour, but this attracted over 39% of applications.
2. The candidate experience has never been more important
Review your recruitment process to identify where your candidate journey can be improved. Any step which introduces delays or lack of engagement with candidates will lead to drop-outs.
3. This situation may be challenging, but the best in the market are doing well
Our own teams – and customers who use our technology – can deliver high quality experiences to candidates and employers alike. Across IT, Professional Services, Hospitality and Care, September was our record recruitment month with almost 100% growth on August.
Of course, things are going to change; October brings the end of furlough which will release up to 1,000,000 people into the jobs market. But analysis suggests that many of these will not have a great skills match to roles which are currently in demand. The findings of the next monthly UK Report on Jobs are unlikely to show a quick departure from the recent trends we’ve seen.
Co-Founder and CEO