Upskilling & Retention

Insight

Published

25 November 2021

Figures published by the Office for National Statistics (ONS) last week suggest UK unemployment continues to fall and job vacancies remain at a record high.

And these impressive figures arise despite the much-used Coronavirus Job Retention Scheme (CJRS) ending on the 30th September 2021.  Indeed government figures suggest that in the final days of the CJRS there were still more than a million workers reliant on the scheme for some or all of their income.

So why hasn’t the ending of CJRS resulted in a surge of new candidates to the recruitment market?

Time will tell

It’s a valid question, and the truth is that we may not have the full picture as yet.

Firstly it is worth highlighting that around half of the last month CJRS claimants were on “flexible” furlough, whereby they were working some hours with their employer and therefore not entirely reliant on the scheme for their income each month.  It is to be expected that many such workers have now returned to full-time work with their employer, particularly as the nation gears up for the Christmas spending season.

It’s also possible that many who were fully supported by the scheme at the end of September may have now been made redundant, and owing to a period of notice may not have yet become an unemployment statistic.  That said, the ONS seem relatively sanguine about the potential numbers in this position, and their release even states;

“responses to our business survey suggest that the numbers made redundant was likely to be a small share of those still on furlough at the end of September 2021”

Which suggests that - for the moment at least - the spectre of mass unemployment (with all its associated social and economic challenges) has been avoided by the United Kingdom.  This is very good news.

The next challenges?

So the next big hurdle for unemployment statistics is perhaps likely to be the success (or otherwise) of the Christmas trading period, which is pivotal to so many businesses in a wide range of business sectors.  Yet even if firms fail (as some always inevitably do) in the post-Christmas period, this may not fundamentally change the dynamics of the recruitment market. 

This is at least partially down to the nation’s departure from the European Union.  As we explored in our August Blog post, the loss of so many EU workers as a result of the Brexit process has dramatically reduced the number of candidates in the UK jobs market.  And the pandemic may have prevented workers from outside of the EU migrating to Britain to backfill many of those now vacant – but still important – roles. 

And this was doubtless part of the thinking of the Confederation of British Industry (CBI), which suggested in September that UK staff shortages could last for another two years.  So those employers hoping that the candidate shortage is just a short-term statistical anomaly might yet be disappointed.

The future?

So where does that leave the employment market, and what action should employers with recruitment needs now be considering?

Perhaps one of the biggest immediate challenges is matching the talents of the candidates currently available to those required in those sectors that are recruiting.  The reality is that those who lost their jobs in sectors such as travel, hospitality, and retail during the pandemic might not have the right skills, experience, and qualifications to be a natural fit in sectors which are desperate for new recruits such as agriculture and logistics.

This issue might well be reflected in the government’s calls for employers to invest more time and money in the training and upskilling of British-born workers.  It’s a laudable political sentiment, yet perhaps overlooks the immediate recruitment challenges that many employers and sectors are now facing.

Upskilling takes time

For the problem with adding skills and providing training is that it inevitably takes time.    

Skills may be taught relatively quickly, qualifications often take far longer, and experience – by definition – takes a very long time indeed.  And whilst the employer invests time and money upskilling their new workers, they will also face the reality that those same employees are likely to be less productive than an experienced recruit.

The other challenge with upskilling workers – and rightly one that employers are nervous about – is that the employee might choose to depart to a competitor once their training programme is complete.

Resignation risks

It’s a very real concern at any time, and far more so when the recruitment market favours the candidate over the employer.  And the resignation risk is perhaps heightened further given that inflation pressures (and the associated cost of living pressures) are expected to run for a similar period of time to the candidate shortage.  It follows that newly trained workers may be more inclined to jump-ship to an alternative employer offering greater income opportunities.

So employers may need to consider how they encourage those recently upskilled workers to remain on board.  Part of this approach should be to improve the social wellbeing of the workplace, with a continuing drive to make employees more engaged in their work, career, and work “family”.  Yet that approach is often far easier said than done, and in any case a report published this week suggests that managers may sometimes overestimate the loyalty of their staff.

Improving the offering

So how else can an employer protect its investment in the recruitment and upskilling of workers?

Tangible rewards such as salary increases are of course always a winner, but might be difficult to justify for many employers following the financial challenges of the last two years.  Yet there are other rewards which can make a difference.

In many organisations junior employees are excluded from the employee benefits offerings which are considered routine for longer-serving and more senior workers.  Yet benefits such as Group Life Assurance and Group Income Protection cover will be well received, and are a relatively minor additional fiscal and administrative cost for an employer to absorb.

And access to Group Private Medical Insurance or health cashplans are much sought after benefits, and may also help speed the return of an ill employee to the workplace whilst bypassing those worryingly long NHS waiting lists.

And some organisations are still overlooking the evident attractions of using salary sacrifice to boost employee pension contributions at no cost to employer or employee also.

Any or all of the above benefits can help improve the appeal of a job to a worker, whilst also protecting the employer’s investment in recruiting and upskilling employees.  And this may well be a priority for many organisations in 2022.

For more information on any of the above topics, please speak to your usual Howden Consultant in the first instance, or visit our website for other contact options.  

Published 25/11/21

Steve Herbert

Steve Herbert

Steve is Head of Benefits Strategy, Howden Employee Benefits & Wellbeing, and is an award-winning thought leader on Pensions, Employee Benefits, and Human Resources issues. He is occasionally accused of making Employee Benefits interesting.

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