Matt Weston, managing director of recruitment firm Robert Half, looks at the current UK labour market and provides some insight into how business can attract and retain the best talent.
Last month’s official statistics showed the highest rate of employment since 1971. The trends we are seeing month-on-month all point to a burgeoning ‘buyer’s market’. Salary growth continues to outpace inflation, while candidates with in-demand skills are now more comfortable than ever negotiating higher salaries, promotions and workplace benefits.
The high rate of employment is fuelled, in part, by employers plugging a widening skills gap to adapt to an increasingly digitalised business landscape. This growing competition is the sign of a healthy labour market, and one where professionals are in the driving seat of their career prospects.
Equally though, this presents significant challenges to businesses: the world of work is becoming increasingly digital and the impact this is having on the skills required for the workplace of the future is consequential.
Digitalisation and automation continue to shape the workplace, with employers looking not only for candidates with the right technical skills, but also for those with exceptional soft skills
The digital dilemma
Robert Half research showed that two in five UK organisations (38%) consider digitalisation to be the main evolving force in the workplace today. However, the UK talent market has a distinct lack of the digital skills needed to help businesses adapt to digitalisation, artificial intelligence and automation – a concern for 53% of CEOs.
Digitalisation has had an overwhelming impact on the modern workplace and as the skills required by business evolves, the war for talent is expected to intensify
In recent years, new job roles have been created and old ones have been displaced. As a result, the makeup of a typical workplace has fundamentally altered from five years ago and is likely to change even more dramatically in the next five years. Newer technologies, such as AI, are beginning to automate manual tasks in operations and processes which are more susceptible to human error.
Businesses are beginning to adapt to a continuously changing workplace, while simultaneously filling in critical skill gaps among their staff. However, it is important to remember that while automation and AI are having a big impact on the workplace, AI is unlikely to completely replace traditional jobs.
With AI taking over manual tasks susceptible to human error, more time is available for strategic, innovative and customer-focused tasks, to add value to AI and to drive the digitalisation of business. Consequently, soft skills such as strategic planning, problem-solving and interpersonal and communication skills are now cited as crucial for success.
These are skills that are difficult to train – unlike technical skills that you can learn over time. As such, employees need to possess the right mixture of the two to succeed in the future workplace. Additionally, these in-demand professionals often care more about the organisation they work for which means they are often cited to have the ideal skillset to drive the business forward.
How can employers attract top talent?
It is clear that as the talent dilemma intensifies, businesses need to adapt their recruitment strategies to offer a compelling employee proposition and to attract the candidates with this skillset.
The emerging buyer’s market has forced employers to improve their approach to candidates and offer attractive packages to give them a competitive edge. They should be prepared to offer competitive financial remuneration to attract and secure top talent through a quick and streamlined hiring process – with seven out of 10 businesses admitting they paid more than they initially planned to secure favoured candidates.
However, financial remuneration is not the only contributing factor to attracting a candidate with the right skillset.
With the current war for talent, the recruiting process has become more of a two way dialogue with the employer needing to sell itself just as much as the candidate needs to. It is therefore important that employers manage to articulate what sets their business and their job offering apart. They need to communicate their employer value proposition.
Career progression, flexibility, training and development and non-financial benefits all play a bigger role than ever before in a candidate’s decision to accept an offer. In fact, many businesses see flexible working as vital to attracting top candidates. Our research found that two in five (40%) businesses introduced a flexible work schedule in the previous three years in a bid to attract top talent, while a third (33%) offered candidates flexible working in their attempt to recruit them.
Keeping top talent in place
While attracting candidates with the necessary skillsets will prove to be one of the main challenges in the upcoming months, the talent dilemma is not over as soon as the employee has signed their contract.
The increasingly competitive market has meant that employees are also more likely to keep their eyes peeled for any other opportunities which might come their way. As such, retaining talent must be at the top of any business’ agenda, with companies focused on effective leadership strategies that makes employees feel respected and valued.
A clear development path and adequate training are measures which businesses are implementing to prevent employees from looking elsewhere. Indeed, our research found that three quarters (76%) of employers believe their employees would leave if they were unable to provide them with adequate training and development.
Employees feel most valued when they have an opportunity for professional growth and are provided with tailored training opportunities, which are aligned with their roles and career goals. While external training courses can develop technical and soft skills, alternatives such as a mentorship scheme, role rotation or simply allowing employees to work on project they’re passionate about can all have a positive impact on an employee’s development. Finding ways to support an employee on their career development journey is beneficial to both the business and the employee, while also supporting retention goals by keeping morale high.
The current jobs market might appear to be positive for candidates. However, this does not come without its own challenges for businesses, as beneath the figures, there is a competitive “buyer’s market” that companies cannot afford to neglect.
Attracting the right candidates in today’s market requires a review of hiring practices. Businesses must shift their approach by offering a rounded package that includes financial remuneration, flexible working options and training and development. Once the desired candidate has been found it’s then important to act quickly – the time taken to hire should not be overlooked.
With the fourth industrial revolution on the horizon, employers must have their recruitment strategies in place, or risk losing out on top candidates.