High employment levels are generally a cause for celebration. The latest statistics from the Office for National Statistics published by the Bank of England in February showed that 32.6m people in this country were in work at the end of 2018 – 167,000 more than in Q3 last year and 444,000 more than twelve months earlier.
The number of people ‘economically inactive’ (unemployed) between the ages of 16 and 64 years’ old as a percentage of the national workforce stands at the lowest level since the early 1970s.
Great news, you might think, but the flip side is that British companies are finding it increasingly difficult to attract the right candidates for the right jobs in sufficient numbers which, in turn, is having an adverse effect on the rate of economic growth. For a country that is already among the slowest-growing of the G7 economies, it amounts to bad news.
The reality is that falling unemployment means employers now must raise their game to recruit and retain the workers they need. UnitBirwelco and rivals in the engineering/turnaround and maintenance sectors are not immune from these trends and neither are our prime customers in the oil refinery, process plant and power industries.
Statistics from Engineering UK show that 203,000 engineering graduates and technicians are needed every year to meet demand. However, a shortfall of 59,000 has led to 46% of companies surveyed facing recruitment difficulties.
To get a job you no longer have to be the perfect candidate. A lot of companies are realising that they might face having to lower their standards if they want to fill the vacancies. Where they might have been looking for the ‘perfect’ candidate before, now ‘good’ might have to be enough.
That means big changes for traditional recruitment process. Companies are spending more time and money recruiting and training new employees. Usually, someone starting a new position would be new to the company, but not the job. Now, businesses might hire someone who’s worked with a related skill and invest the necessary six weeks, or six months, to bring this person up to speed. Apprenticeship programmes are not only socially desirable, but essential.
Most importantly, talent retention has become more important than ever, resulting in businesses offering more competitive wages, benefits and flexible schedules.Labour scarcity is helping workers to win better deals after years spent being grateful just to have jobs.
Of course, some labour shortages are a concern. In the UK, for example, immigration restrictions have blocked employers from hiring some workers from abroad that they cannot find at home at any price. That will only hold the labour market back.
The bottom line is that the UK labour market is showing real signs of tightness. After several years in which unemployment has fallen further than we anticipated, recent developments in the labour market suggest the UK is finally approaching full employment. It is an expensive time for employers in industries where skilled workers are essential.