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Recrutiment & Employment Confederation

The recruitment industry could help address the skills shortage in the UK

Business advice


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This article was originally written as the special feature in the June 2021 edition of Report on Jobs.

After starting the year with the prime minister announcing the third national lockdown to tackle the spread of the coronavirus, business confidence in the UK economy hit a low point. Fast forward five months, and we find ourselves in a more optimistic situation with the recovery well underway. After a turbulent 15 months for the UK economy, we have seen growing evidence of the resilience of the labour market, especially in 2021. And with the news that more than 60 million vaccine doses have been administered, we are looking at a brighter second half of the year. 

Ealy data from the REC’s latest JobsOutlook survey clearly shows the growing optimism amongst British employers, upon entering the final stage of the roadmap to ease restrictions. In the three months to April, employers’ confidence about making new hires and investing in their businesses surged by 15 percentage points to net: +28, the highest the index has been since June 2016. Moreover, business confidence in the UK economy continue to improve and was at its highest in almost three years (net: -10). With the progression of the vaccine programme and the re-opening of the economy, sentiment surged across the individual months of this quarter, from net: -43 in February to net: +20 in April.  As the economic outlook improves businesses will become more confident to bring in new staff in the coming months. Hiring intentions for permanent staff in both short term (in the next three months) and medium term (in the next 4-12 months) rose to net: +24 and net: +31 (the highest level since December 2018).  

Further evidence about the present job creation boom and the improved confidence in the economy came from the REC’s latest Jobs Recovery Tracker. In the first week of May, we saw a further 181,000 new job postings, giving a total of 1.53 million active job postings in the UK. This came on top of a new record high for any week since the onset of the pandemic – 211,000 new job adverts were recorded in the last week of April. Moreover, the latest ONS Labour market overview indicated that the number of payroll employees has increased for the fifth month in a row, echoing the increased demand for new staff. 

As the recovery gathers momentum and the economy opens up, employers are again faced with a long-running issue that was made worse by the Coronavirus pandemic and the EU trade deal – many are struggling to find skilled candidates. This was echoed by the latest Department for Education’s (DfE) Employer Skills Survey, which found that one in four (24%) of all hard-to-fill vacancies were due to skills shortages, an increase of two percentage points since 2017. What is most concerning, is that almost 60% of these shortages appear in middle and high-skilled occupations.  

This is where recruitment could play a vital role in supporting businesses to fill not only positions but also skills that are in high demand. The REC’s Recruitment and Recovery report shows evidence that the industry helps place over a million workers in employment and thus supports £86 billion in gross value added to the economy. Moreover, recruiters play a crucial role in social mobility, helping over 300,000 people to leave unemployment for a permanent role every year. Thus, the recruitment industry could support both business leaders and the government to make sure skilled workers have access to new jobs as they are being created.