Boom for the Labour Market.....with a strong word of warning

There is a smile on the face of many businesses at the moment – lockdown is easing, productivity remains high and debates have shifted to more positive, future-planning subjects, such as hybrid working models.

May 24, 2021
May 24, 2021
CFO News Article

The vast majority of the recruitment sector has been working in a buoyant market in 2021. The REC and KPMG Report on Jobs published last week, showed that April saw the largest acceleration in demand for new workers since 1997. This was for permanent &  interim staff, across the south & the north and across nine of the ten main job categories (retail being the only marginal decline).

This is all excellent news, but does quickly lead to the question of how can the supply of workers meet the increased levels of demand? The national media have certainly picked up on this over the past week, some of the more interesting facts that have been reported;

  • McDonalds is boosting wages as they struggle to attract enough workers to keep their restaurants operational
  • Pub chains are relaxing their past qualification requirements
  • Retail and leisure sectors increasing referral schemes to offer a “bounty” for people successfully introducing friends to the workforce – now on offer to current employees and customers

Away from the retail and leisure sectors, demand is also rising. The Reed job board saw its largest single day of new jobs last week (18,000) and reported that this represented a spike across all disciplines and sectors.

Accountancy & Finance departments faced a shortfall in supply of talent before the pandemic and this has stretched further this year. We publish our salary survey tomorrow, which will feature a traffic light report on the availability of finance staff. Of the 31 categories of role within finance that we assessed, 12 are in short supply of candidates, 12 have reasonable supply and only 7 have a strong supply.

The answer for governments is complicated and long-term. Almost every employer needs a short-term plan to compliment their longer-term strategy. Review and modification of recruitment, reward and retention strategies should feature highly on the objectives of most boards and management teams. With the market forces and available solutions evolving at such a pace, workforce planning is challenging right now. The consequences of getting it wrong can be even more disastrous for employers right now. Planning thoroughly and in the context of the current market, will give many a competitive edge.

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