Two-thirds of large employers (67%) and more than half medium-sized employers reported shortages of candidates. But the problem is most acute among small businesses (fewer than 50 employees) with more than three quarters (81%) experiencing difficulties recruiting.

The Recruitment and Employment Confederation said that its figures showed that despite a year of slower economic growth and lower overall hiring, the UK jobs market was still struggling to meet employers’ demand.

According to REC chief executive Neil Carberry, too few firms had appreciated that despite slow growth the jobs market had changed at a fundamental level.

He said: “Only 9.5% of firms told us they were looking to temps, freelancers and contractors to help. Yet support from agencies on both temporary labour and innovative routes to hiring permanent roles are vital to getting the people a business needs now.”

He added: “For too long, the debate within businesses and with governments about productivity, production design and workforce development has been sterile. That has to change if the economy is to reach its full potential and boost prosperity, public services and incomes.”

The REC’s Overcoming Shortages report found that a 10% surge in demand for staff across the economy, and the labour market restricted by shortages, could lead to a 1.2% fall in expected GDP and productivity by 2027 – costing the economy anywhere between £30 billion and £39 billion every year.

The REC/Savanta survey was of different size employers across the UK in private and public sectors, asking 167 employers of different sizes: “How, if at all, has your attitude towards temporary agency workers, freelancers and contractors changed because of ongoing candidate shortages?”

The problems being experienced especially by smaller businesses have been echoed by another report, which showed the proportion of small firms that were expanding their workforce fell by 40% between 2012 and 2022.

The new State of Small Businesses in Britain report, by the Enterprise Research Centre at Warwick Business School/Aston University, showed that Brexit, the pandemic and cost of living increases had damaged small businesses disproportionately.

Among the report’s key findings were that small businesses have been hit by an increase in presenteeism with 37% of firms in 2023 reporting that employees continued to work while unwell or beyond their contracted hours. This was accompanied by an increase in the rate of mental health-related sickness.

Source - Adfam McCulloch, Personnel Today

Link - https://www.personneltoday.com/hr/candidate-shortage-afflicts-two-thirds-of-businesses/

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