Why the number of 'hard to fill' vacancies are on the rise

The number of employers with ‘hard to fill’ vacancies has shot up in the past quarter with firms planning to improve wages, job quality and upskill existing staff as a result, according to a leading people development organisation.

Daphne Doody-Green, head of the CIPD in Northern England, says staff wellbeing will be a “massive issue”.

Almost half, 47 per cent, of employers reported having vacancies that are hard to fill, and more than one in four, 27 per cent, expect the number of jobs that are difficult to fill to increase in the next six months, the Chartered Institute of Personnel and Development’s (CIPD) latest quarterly Labour Market Outlook (LMO) showed.

Employers were surveyed about their hiring, pay and redundancy intentions for the last quarter of 2021 in September, just as the furlough scheme was ending.

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The proportion of employers with hard to fill vacancies jumped from 39 per cent to 47 per cent in the quarter. The sectors most impacted were construction, healthcare and public administration and defence.

Gerwyn Davies, senior labour market adviser for the CIPD, said: “Employers have a challenging few months ahead with many anticipating increased recruitment difficulties.

“On the upside, it’s positive to see that some employers are getting better at sourcing labour by taking steps to improve how they recruit, retain and train staff.

“However, there’s a relatively long tail of employers who could be doing more to attract and make full use of available workers.”

Nearly three quarters, 71 per cent, of employers surveyed are planning to recruit in the three months to December 2021, with intentions at their highest since the onset of the Covid-19 pandemic.

One in ten employers are planning to make redundancies, down from 13 per cent last quarter. This is the latest indication that the end of the furlough scheme will not lead to widespread redundancies as was originally predicted.

The continued uptick in recruitment, paired with another modest fall in redundancy intentions amid continued labour shortages suggests there will be further difficulties for employers in the coming months.

In response, employers have adopted a variety of tactics in a bid to combat recruitment difficulties.

Almost half, 47 per cent, have raised wages over the past six months to help offset difficult to fill vacancies.

Other popular tactics include upskilling existing staff, 44 per cent, hiring more apprentices, 27 per cent and improving job quality, 20 per cent.

The rapid expansion in hiring activity, coinciding with a fall in labour supply underlines the need for a temporary job mobility scheme for young EU nationals, the CIPD says.

Mr Davies said: “More business support is required from the government to help employers increase their capability to invest in skills and create better quality and more productive jobs.

“This is essential if the UK economy has any hope of transitioning to a high-skill, high wage economy.

“The research findings strengthen the case for extending the existing Youth Mobility Scheme.

“This would prove a timely, cheap and effective ‘safety valve’ to help ease immediate labour shortages.”

Wellbeing set to be key

Staff Wellbeing is likely to become an even more prevalent issue for businesses going forward.

Daphne Doody-Green, head of the CIPD in Northern England, says it will be a “massive issue” complicated by the fact that staff are often working in different ways from different locations.

It has put a lot of pressure on professionals working in HR and people development. She says: “They have been under so much pressure to deal with all this change.”

Ms Doody-Green added: “The biggest indicator about where employees heads are at is around whether their wellbeing is being looked after.”

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James Mitchinson