Demand for staff continues to climb as candidate availability falls, poll reveals

Experts warn that a labor shortage is putting companies’ resilience to the test, as supply fell drastically at the end of 2021.

According to a survey of companies, demand for permanent and temporary employees is increasing while candidate availability is decreasing.

The latest KPMG and REC UK Report on Jobs poll indicated that, while the rate of vacancy growth slowed marginally to an eight-month low in December, there was still ‘strong’ demand for candidates.

Towards the same time, applicant supply declined substantially at the end of 2021, although to the lowest level since April of last year, with recruiters polled citing the pandemic’s uncertainty, as well as a low jobless rate and fewer international employees, as factors affecting candidate numbers.

Many firms are feeling the pressure of increased labor demand, according to Claire Warnes, head of education, skills, and productivity at KPMG UK. This is expected to impair businesses’ operational expenses and ability to expand.

“The availability of workers is testing the resolve of employers across the economy and will likely cause distortion in recruitment patterns as businesses shift focus from long-term growth to short-term cover,” she said.

“However, we shouldn’t underestimate the business community’s ability to adapt to these new conditions and look to training and technology solutions to find a way forward,” said Warnes.

Noelle Murphy, senior HR practice editor at XpertHR, said these findings indicated that businesses’ focus would move to recruitment and retention. “The pandemic saw a shift in the employer-employee relationship, with employee wellbeing moving to the forefront,” she said.

This resulted in “less of a transactional connection and a more authentic one” between employers and their workforce, Murphy said, something that employees would be reluctant to move back from.

Neil Carberry, chief executive of the REC, said he expected staffing shortages to last longer than the pandemic. “Businesses need to make sure they are reacting to the long-term challenges of this market, thinking harder about their offer to staff and how to shape their future workforce,” he said.

“Recruiters are ideally positioned to help employers with this, and support governments across the UK on the skills, immigration and tax reforms that are needed to keep us competitive.”