Where are all the candidates?
Every recruiter is talking about it – where have all the candidates gone? Following months of trying to manage an influx of applications, recruiters are now trying to grapple with the opposite problem: a distinct downturn in applications.
This isn’t just anecdotal. WaveTrackR has recorded a downward trajectory in applications in nearly every industry over the past couple of months and the average number of applications per job has been decreasing for 5 consecutive months now. Data from May’s UK Report on Jobs revealed that vacancy growth hit the highest rate since January 1998 but the supply of workers dropped at the quickest rate for four years. Why is candidate activity so low compared to just a few months ago? We investigate the facts and look at what recruiters can do now to attract the talent that is out there.
In many ways, things are looking up. WaveTrackR’s June report has shown that jobs were a massive 235% above the 2020 monthly average. Leading economists have revised their forecasts and are now predicting that the UK economy will recover by the end of 2021 – a full year earlier than originally anticipated. The market has picked up across most industries and business confidence is soaring but candidate confidence is not. Many are hesitant to make a change whilst there remains uncertainty in the market. There are a lot of ‘what ifs’ still, which is keeping many already in a job from making the move to a new role.
Trapped by furlough
There is no doubt that the furlough scheme has helped to save a huge number of jobs and businesses but some question whether the furlough scheme has also been holding back the market. As of May 31st 2.4 million people were still on furlough (down from a peak of 5.1 million in January) and about 30% of employers still had some staff on the scheme. That represents a lot of people that are currently not working but aren’t in the job market. The fear of looking for another job for those who are still furloughed (and, to an extent, those that are currently in a job), is that they would then not be entitled to it if it was needed. This factor will of course be addressed when the furlough scheme ends September.
Lack of overseas workers
A combination of overseas workers moving home during the pandemic and Brexit making it far harder for EU workers to seek and find employment in the UK is leading to gaps in the market that have traditionally been plugged by such workers. Studies have shown that as many as 1.3 million overseas workers are estimated to have left the UK since the end of 2019, many having worked in areas such as Hospitality and Construction that rely on overseas workers.
More demands of parents at home
Lockdowns were particularly tough on parents who had to cope with home schooling and/or the care of younger children as well as work. Post-lockdown and things are still tough, with self-isolation rules for schools leading to huge numbers of children out of school. The bubble system saw more than 640,000 children sent home in the final week of June, which meant that 640,000 sets of parents were having to juggle the care of their children and their jobs. This week’s announcement of the easing of rules for schools and the ending of class bubbles should at least take the pressure off working parents, perhaps leading some to both have the headspace and feel the risk has reduced enough to consider a change of job.
Some older workers who were made redundant during the pandemic have simply retired rather than face the struggle to find a job amongst huge competition from younger candidates. Over-50s community and employment hub RestLess found that there was a nearly 300% rise in redundancies for those in their 60s (compared to a 71% increase for those in their 50s) in the final 3 months of 2020 and by August 2020 200,000 older workers had already been forced into early retirement. That’s a huge number of experienced workers leaving the market.
This is a more industry-specific factor as of course other industries will be benefitting at the expense of a few and it is one that the government has been actively encouraging with its famously controversial campaign. A number of workers made redundant from industries that were particularly hard hit by the pandemic have found jobs in other industries, leaving yawning gaps in the ones they left behind. Hospitality is one such industry that has been left reeling by a lack of candidates. Indeed, Covid and Brexit have between them caused a staffing crisis in Hospitality. Some Hospitality workers have re-trained or used their transferable skills to enter industries with a high proportion of jobs and/or offering career stability. The financial services sectors are one example of an industry perceived to be stable and that can potentially offer home working. WaveTrackR data has shown that financial industries such as Banking and Finance are experiencing high average numbers of applications per job, with Insurance receiving an average of 70 applications per job in June compared to the average across all industries of just 10.
Historic skills shortages have not only added to the problems around candidate supply, they have worsened in some industries. For example, WaveTrackR data has shown that Health & Nursing has received the lowest number of average applications per job for the past 5 months, netting an average of just 2 in May and June. The sector has faced training and recruiting issues for several years but the pandemic pushed many to breaking point and it is now struggling to entice candidates and retain the workers it does have.
Extra training and post-graduate education
Many workers who have re-assessed their lives and careers during the pandemic, have been furloughed or made redundant, have made the decision to retrain. Retraining and up-skilling is certainly not a bad move but the fact is that it temporarily takes workers out of the job market and possibly permanently out of their previous industry. There has also been a rise in graduates staying in higher education to complete a postgraduate degree. The reasoning is that this will give them the edge over the competition in a challenging market and delay their entry into it until the outlook is more positive, meaning less graduates then usual entered the workforce over the past year.
What can recruiters do?
Recruiter approaches to attracting and engaging talent need to adapt to the changing market and evolving candidate preferences. Salaries are beginning to be pushed up by declining candidate availability so ensure the market rate is being offered. Really think about what the ‘must haves’ are in your job ad and what could be negotiable. Be flexible in what you expect from candidates when it comes to training and qualifications.
Understanding what candidates are now looking for, what drives their search, is also important. The option of flexible working where possible (both in terms of time and a work from home/office mix), holistic benefits rather than materialistic perks, and a caring culture top the list. Focus on your candidate experience – attracting talent is just the first step, you need to respond quickly, avoid making the process too lengthy and laborious with too many interviews, and keep the candidate engaged and updated throughout.
The market will stabilise but it has been turned upside down over the past 18 months and it will take time. However, with the economy growing faster than predicted we could be on the road to stability more quickly than forecast. In the meantime, hone both your talent attraction strategy and your candidate experience, dig deep into your talent pool and get onto social media to seek out passive candidates.