With talent in short supply, recruitment cannot be business as usual. As UK businesses struggle to hire the talent they need, employers must acknowledge that the world of work has changed. Recognition of candidates’ needs, and a new focus on retraining and retaining existing personnel are now essential for success.
Worker demand meets worker resistance. As businesses in every sector and across all four nations of the UK scramble to recruit the workers they need, many are reporting difficulty in hiring due to a lack of skilled candidates.
As of Q3 2022, a record 78% of UK organisations could not secure the talent they require - an increase of 69 percentage points compared to 2010.
This is a problem that is not going away anytime soon. Even as employer recruitment confidence cools into the first quarter of 2023, (+19%, a decline of 5% on Q4 and -15% year on year), personnel demand remains elevated, with the North East of England leading the way with a net positive hiring outlook of +27%, and the East of England (+26%) and Wales (+25%) following close behind. Even London and the South-East remain buoyant, (+24% and +20% respectively), despite declines since Quarter 4.
According to the UK Office for National Statistics, there were 1.26 million job vacancies in August 2022. An increase of 470,000 (51%) from the pre-pandemic levels seen in early 2020, and 215,000 (20.4%) above the same time last year. These were roles in industries as diverse as IT and tech, hospitality, retail, manufacturing, customer service, finance, and construction, and they underline the widespread nature of the hiring challenges UK businesses face.
Recruitment difficulties are not limited to young start-ups or struggling SMEs, they are prevalent in organisations from the largest to the smallest, with the most in-demand roles involving service jobs, including contact centre and customer support roles. Although IT and data tops the chart of the five most in-demand roles, the need for front office/customer facing, admin/office support and sales & marketing candidates rank at numbers 2, 3 and 4.
Clearly, there are openings for almost any UK worker seeking to switch jobs or to re-enter the workforce. So why, with the balance of unemployed to open vacancies being almost flat, is there a candidate shortage of such degree? Although demographic shifts, workers taking early retirement post-pandemic, an exodus of EU workers post-Brexit, and delays in the issuance of work-visas to foreign talent, are exacerbating the shortage of skilled candidates, these issues alone cannot support the scale of the nation’s employment difficulties. Other reasons are in play…
In the post-pandemic era, employee attitudes to work have changed and their expectations have grown to encompass a range of needs, some of which are deal breakers in any hiring situation. So, while fair wages and stability will always be important, they are increasingly hygiene factors.
Opportunities for advancement, greater recognition of worker input, upskilling, and increased well-being, both emotional and physical, are now firmly front and centre when it comes to employee priorities.
People don’t just want to survive, they want to thrive at work – and they are willing to vote with their feet if they do not get what they want - as evidenced by the great resignations, great reshuffles, and great reprioritisation of the past year.
The result is that employers need to listen, rethink and act differently to attract and retain talent in the most competitive labour market in living memory.
Market forces dictate that when demand exceeds supply, prices rise. This is as true with personnel as it is with commodities.
Thus, the UK’s record demand for workers has seen a predictable rise in salary expectations, with 62% of businesses reporting candidates asking for salaries above industry norms.
However, even though candidate demand for increased compensation is a major hurdle for businesses, the inability to provide requested salaries is not the only hiring pressure that businesses face – lack of candidates with sufficient experience or specific skills, an inability to satisfy candidate demand for flexible working, and limited opportunities to train, upskill and mentor workers after hiring are also significant barriers to recruitment – particularly in CC&CS.
The arrival of Covid-19 in 2020 was the spark that lit the fuse that lit the explosion in WFH and hybrid working. When lockdowns forced more than 46% of the UK workforce to perform some or all of their work from home, new perceptions of where to work and when to work were born.
Which is why now, even as the impact of the pandemic fades into memory, employee expectations regarding WFH and hybrid working remain strong – with 93% of surveyed workers saying that work flexibility is important to them, 64% wishing to move to a four-day week and 45% asking for the freedom to choose what time they start and end their day of work.
As demonstrated with worker hiring demands, these don’t appear to be temporary trends, despite business and public sector interventions to encourage people back to the office. More importantly, employees who get the working platform they want are already returning the positive gesture to the organisations they work for: Companies that have embraced the change report 55% of their workforce are high-performers, compared to only 36% of organisations who maintain a standard 40 hours working week.
If the performance disparity between those organisations that have moved to flexible working and those that have not becomes a permanent fixture in British business, the contact centre and customer services industry may experience a period of severe disruption – as the 20% of CC&CS businesses who will not or cannot support WFH or hybrid working suffer rapidly declining results due to their inability to recruit the staff they urgently need.
Automation and the increasing digitisation of work are adding to the UK’s acute hiring pressures. According to FutureDotNow, (a coalition of industry leaders focused on closing the digital skills gap for working age adults) – of 30.3 million people in the UK’s working population who have a foundational level of digital skill, about 11.8 million are unable to complete at least one of Lloyds Bank’s 17 Essential Digital Skills for Work.
FutureDotNow goes on to state that nearly two-thirds of workers would benefit from growing their basic digital skills and that they can be found in every level of business, from the c-suite to the shop floor. Most critically, the lack of digital skill is a persistent brake on employee productivity, personal advancement, and the scope for employees to change job and/or career.
This is a problem that extends far beyond the elite realm of technology and IT. The digital skills gaps prevents many people from fully participating in basic modern activities, and 32% of UK workers with at least a foundational level of digital skills can’t use digital systems such as expenses or budgets systems, manage digital records or financial accounts, or operate CRM systems and simple marketing programmes.
For CC&CS business that place heavy reliance on sophisticated technology, such as automated CRM, product service monitoring, machine learning and AI intuition, the UK’s relative digital illiteracy rates indicate urgent need for action. Investment in training and upskilling is essential. Current and future CC&CS employees will need opportunities, and in some cases incentives, to build the core digital skills that will create new opportunities for individuals and employers alike.
Just as it is more cost-effective to keep and develop an existing customer than it is to find a new one, so it is more productive for businesses to retain and grow their existing workforce than to continually hire new talent. In CC&CS, where the 2021 annual attrition rate was 42%, compared to the UK average of 15%, and the cost of hiring new workers is rapidly increasing, finding the right incentives, roles, and opportunities to retrain and retain current staff has become ever more important.
It will come as no surprise to discover that the the top barrier for retaining customer service team employees is a failure to meet the worker’s salary expectations (14% of surveyed organisations).
However, 76% of CC&CS businesses quote reasons other than compensation as the biggest barrier to retaining the workers they already have – these include a lack of internal career opportunities (8%), a lack of upskilling developmental opportunities (8%), and a lack of mentoring (6%).
Whereas budget restraints may prevent many CC&CS businesses from engaging in an upward wage spiral, there are multiple reasons why retraining to retain staff makes sense. Increasing worker knowledge and providing clear paths to promotion pays dividends, as employers who provide added customer service training reported increased customer satisfaction through better service (19%), finding new ways to create a motivated workforce (16%), identifying a ‘work ready’ workforce, and discovering new talent skills that match specific employee roles (14%). At the bottom line, training and upskilling doesn’t just help to retain workers, it makes them better workers and builds a better business.
