There has been a steep increase in businesses hiring temporary staff, freelancers and contractors in the past quarter (1 January to 31 March).
The latest Hiring Trends Index by Totaljobs has revealed that temporary staff hires were up 69% in 2024, as businesses see increased competition to fill skills gap. Three in five (59%) businesses are experiencing increased competition to find the right skills, rising to 74% of companies with over 1,000 employees.
These skills shortages had created a significant change in candidate expectations compared with pre-pandemic levels, said the online recruiting giant. Three-quarters of employers said that candidates had higher salary and benefit expectations, with 69% claiming that demands for remote working had now created a barrier to filling positions.
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As a result, 25% of businesses were investing in AI and training to fill these gaps. Over a third of those taking action (34%) were already using AI to supplement their workforce.
Most businesses (85%) were using at least one skills-based hiring approach, the study suggested. Approaching half (43%) had updated job adverts to focus specifically on key skills and competencies, and a third (34%) had trained their hiring managers to conduct interviews focused on competency.
A further third (34%) had adjusted screening criteria to expand talent pools, with a fifth (20%) removing university degree requirements from their job adverts to help widen the search. A quarter (26%) of employers plan to increase efforts to diversify hiring in the second quarter of this year.
Almost all businesses (96%) that deployed at least one of these approaches had reported benefits in hiring, with 39% claiming it had improved talent attraction. Over a third (35%) said it helped them find better candidates, with 34% stating that it has improved candidate engagement.
The skills-based hiring methods have even increased the diversity of their talent pools, according to 31% of respondents, and 29% claimed it had reduced time to hire.
Totaljobs’ research identified a trend towards the incentivisation of upskilling, with 88% those employers who were taking active steps to address skills gaps in the next three months, rewarding staff who had successfully completed a training or certification program with promotion opportunities and pay rises.
However, despite 40% of employers saying they will increase salaries to attract talent with the required skills, the research found that only a fifth (21%) had conducted a skills gap analysis to help with workforce and succession planning in the long-term.
Julius Probst, labour market economist at Totaljobs (part of The Stepstone Group) said that although it was positive to see the various steps that employers are taking to address skills gaps, “many of these are only short-term fixes”.
He added: “Only a fifth of businesses have planned for the long term and conducted a skills gap analysis. As long as employers look to the short-term then they’ll constantly find themselves on the back foot in the competition for talent. Workforce and succession planning will allow businesses to forecast what skills they need – both in the immediate and near future – and design a talent strategy to ensure they don’t fall into a perpetual skills gap.”
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