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Employment is up, but so are vacancies – what does this mean for business leaders?

Article by Matt Weston, UK Managing Director - Robert Half

Many of us are feeling optimistic about the year ahead, with the prospect of the world returning to normal driving increased employment activity in the market.

The latest figures from the Office for National Statistics show that employment in the UK continues to rise. The current employment rate is estimated at 75.5 per cent, just 1.1 per cent lower than before the pandemic – and yet the number of vacancies continues to increase.

Vacancies are at an all-time high at 1.25 million – and while the level of growth has slowed, the total number still increased by 11.4% from the last quarter. Some businesses are looking to re-introduce roles that were made redundant during the pandemic, but the flourishing economic recovery is also resulting in new jobs – and there is currently not the talent or skills in the market to full them.

Investment is a driving force for the buzzing market
Analysis by KPMG in the middle of last year, showed that £73.7 billion in private equity funding was invested in UK companies in the first half of 2021 and there were 97 initial public offerings in 2021 according to EY – the highest level since 2007.

While investment may slow in 2022 and the market settles, more is on the way, and many of those companies who have received funding during 2021 are looking to grow their workforces to achieve the financial growth needed to deliver return on investment.

As a talent solutions provider specialising in professional services, finance, accounting, tech and marketing roles, we’re seeing unprecedented demand driven by the voracious appetites of investors and the ambitions of many of the UK’s most successful and fast-growing companies.

There is huge demand for senior finance and risk talent, especially those with experience of leading companies towards an IPO, helping them to manage upcoming mergers and acquisitions or supporting finance functions for consolidated or group companies.

On the flipside, businesses are also looking for junior and mid-level roles who can help them to achieve their goals. From tech-led companies seeking dev-ops talent, to fast growing companies hiring en masse, the market has never been busier.

What does a busy market mean for employers?
With so many employers trying to fill the same roles and seeking the same skills, the market is fiercely competitively. The candidates we are speaking to on a daily basis have multiple offers on the table, and in the interim space, contractors are rarely available for more than a day.

Business leaders need to act quickly and make sure they are offering the most competitive package on the market to attract new talent. Growth in regular salaries increased by 3.8 per cent at the end of last year – and this will continue as the war for talent wages on. Our 2022 Salary Guide has the latest salaries for more than 200 roles across the UK, but remuneration isn’t the only thing to consider.

Benefits, hybrid or flexible working and even a companies’ ESG activity are considerations for many of the candidates we’re speaking to, and it can certainly make a difference if they are choosing between multiple roles.

According to our new research, published today, as many as 9.4 million employees are planning to look for a new role in the first six months of this year, business leaders also need to give significant thought to their retention strategy.

While salary and benefits are still the main drivers for candidates to move on, an open and honest conversation can help to identify other pressure points that may be pushing candidates away. This could be anything from flexible working to relationships within the team or career progression opportunities, but this approach is the most effective for retaining your top talent if you’re prepared to act.

Retention is crucial in a market like this, especially if you have ambitious plans for growth. Hiring new employees takes time and money, and so does the onboarding and training process. The more you can retain your best talent while bringing in strong candidates, the less your productivity will be affected – ultimately allowing you to achieve your business objectives more quickly.

    Matt Weston, UK Managing Director at Robert Half, specialist talent solutions agency.

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