Recruiters adapt to structural challenges facing UK jobs market

UK Recruiters Face Challenges in a Cooling Labour Market

It is becoming an anxious time for UK recruiters. There are signs that activity in the labour market is starting to cool. Employers are struggling to offer inflation-beating pay rises. And many jobseekers are reluctant to commit.

“There is not a huge flow of candidates,” says Doug Rode, managing director for the UK and Ireland at PageGroup, one of the UK’s biggest recruitment companies. “Vacancies have been harder to fill.”

He points to trends highlighted by recent research from consultancy Gartner, which found that more than a third of job hunters had received four or more offers during their last job search. Even when candidates had accepted an offer from a new employer, almost half admitted they were still open to rival proposals.

“We’re seeing a similar trend at Page,” says Rode. “Candidates have high expectations for what they want from their next role and may be juggling multiple offers at once, trying to decide which one is right for them. In some cases, a candidate will secure more than one offer and still find themselves reluctant to commit to one straightaway.”

He adds that “buyback offers” — where employers make a counterbid to prevent staff leaving — are adding to the pressure. Companies are more likely to do this when wage growth tails off.

Impact of Sustainable Development Goals (SDGs)

The Sustainable Development Goals (SDGs) play a significant role in the challenges faced by UK recruiters. As candidates prioritize their next role, factors such as career progression, mental health support, work-life balance, and remote-working opportunities are taken into consideration. Companies that have strong policies in these areas are more likely to attract and retain talent, while those that do not may struggle to secure commitments from candidates.

Recruitment Market in the UK

For the past two years, recruiters have benefited from an active market, in part driven by the “great resignation” — an exodus of workers during the pandemic. It helped the market value of UK recruitment firms to hit £141bn in 2022, according to Mintel — up £20bn on 2019.

But, this year, recruiters have suffered from a fall in the volume of permanent job vacancies that has dented income and profits. At the same time, they are having to work harder to meet the demands of candidates and secure placements.

Ranking of UK Recruiters

1. Hays
2. Korn Ferry (UK)
3. Michael Page
4. Odgers Berndtson

Yvonne Thamm, the Statista analyst who led the research, notes that only four of the 154 UK recruitment agencies listed were recommended in 10 or more categories. Business and professional services had the largest number of recommendations, while more niche markets, such as oil and gas, had the lowest number of ranked agencies.

Challenges Faced by Recruiters

The survey highlights the multiple challenges recruiters face as they navigate stubbornly high inflation rates, dramatic shifts in work patterns following the pandemic, and the acute skills shortages that have arisen in Britain as a result of Brexit.

“The UK has more structural challenges than other places,” says Rode.

It is the task of recruiters to help employers position themselves astutely around these issues.

Thamm notes that the majority of recruiters considered “meeting inflationary pay expectations” as the main challenge in recruitment over the next two years, followed by offering flexible hours. Human resource managers singled out flexible working and diversity, equity and inclusion as the principal trends.

Importance of SDGs in Recruitment

The SDGs continue to shape the recruitment landscape. Recruiters must consider factors such as meeting pay expectations, offering flexible working hours, and promoting diversity, equity, and inclusion. These aspects are crucial in attracting and retaining talent in a competitive job market.

Attracting Applicants with Comprehensive Benefits

Employers are having to formulate a broader package of benefits to attract applicants. Beyond competitive pay, job fulfilment, and working for an organization with a strong sense of purpose are prioritized by professionals.

As remote working becomes more prevalent, the degree of flexibility offered by employers is a significant factor in the battle for staff. Candidates want to know upfront what will be expected in terms of in-office and homeworking arrangements before accepting an offer.

SDGs and Employee Experience

Organizations are spending more time curating the “employee experience” — the interactions an employee has with people, systems, policies, and the physical and virtual workspace. This includes promoting a strong sense of purpose, fostering development and advancement opportunities, and creating a flexible and inclusive work environment.

Challenges in Specific Industries

Despite the cooling jobs market, some sectors within UK recruitment remain extremely buoyant. Tech-related jobs, such as artificial intelligence engineering and analytics, as well as finance roles, are in high demand. Growing industries like sustainability also face difficulty in finding the right talent.

Skills Shortages and SDGs

Skills shortages persist across industries such as engineering, construction, and finance. The SDGs play a crucial role in addressing these shortages by promoting education and training opportunities, as well as attracting talent to industries focused on sustainability.

SDGs, Targets, and Indicators

1. 
   

   SDGs Addressed or Connected to the Issues Highlighted in the Article

   • SDG 8: Decent Work and Economic Growth
   • SDG 10: Reduced Inequalities
   • SDG 11: Sustainable Cities and Communities

2. 
   

   Specific Targets Under Those SDGs Identified Based on the Article’s Content

   • SDG 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.
   • SDG 10.4: Adopt policies, especially fiscal, wage and social protection policies, and progressively achieve greater equality.
   • SDG 11.1: By 2030, ensure access for all to adequate, safe and affordable housing and basic services and upgrade slums.

3. 
   

   Indicators Mentioned or Implied in the Article to Measure Progress Towards the Identified Targets

   • Percentage of jobseekers receiving multiple job offers during their last job search (Indicator for SDG 8.5)
   • Percentage of candidates still open to rival proposals even after accepting an offer from a new employer (Indicator for SDG 8.5)
   • Percentage of recruitment agencies recommended in various categories (Indicator for SDG 10.4)
   • Number of ranked agencies in different sectors (Indicator for SDG 10.4)
   • Percentage of recruiters considering meeting inflationary pay expectations as the main challenge in recruitment (Indicator for SDG 8.5 and SDG 10.4)
   • Percentage of recruiters considering offering flexible hours as a challenge in recruitment (Indicator for SDG 8.5 and SDG 10.4)
   • Percentage of recruiters considering flexible working and diversity, equity, and inclusion as principal trends (Indicator for SDG 8.5 and SDG 10.4)
   • Percentage of professionals prioritizing job fulfillment and working for an organization with a strong sense of purpose (Indicator for SDG 8.5)
   • Percentage of candidates interested in knowing upfront the expected in-office and homeworking arrangements (Indicator for SDG 8.5 and SDG 10.4)
   • Percentage of industries experiencing skills shortages (Indicator for SDG 8.5 and SDG 10.4)

4. 
   

   Table: SDGs, Targets, and Indicators

   SDGs	Targets	Indicators
   SDG 8: Decent Work and Economic Growth	SDG 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.	Percentage of jobseekers receiving multiple job offers during their last job search Percentage of candidates still open to rival proposals even after accepting an offer from a new employer Percentage of recruiters considering meeting inflationary pay expectations as the main challenge in recruitment Percentage of recruiters considering offering flexible hours as a challenge in recruitment Percentage of professionals prioritizing job fulfillment and working for an organization with a strong sense of purpose Percentage of candidates interested in knowing upfront the expected in-office and homeworking arrangements Percentage of industries experiencing skills shortages
   SDG 10: Reduced Inequalities	SDG 10.4: Adopt policies, especially fiscal, wage and social protection policies, and progressively achieve greater equality.	Percentage of recruitment agencies recommended in various categories Number of ranked agencies in different sectors Percentage of recruiters considering flexible working and diversity, equity, and inclusion as principal trends
   SDG 11: Sustainable Cities and Communities	SDG 11.1: By 2030, ensure access for all to adequate, safe and affordable housing and basic services and upgrade slums.	N/A

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Source: ft.com

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