Biggest challenge getting talent into the workforce
IN a complex time it feels like there’s one thing front of mind for most of the businesses I speak to: recruitment.
The great resignation continues to bite.
According to the Chambers’ Quarterly Business Report for Q1 – our temperature check of the local business community – 65 per cent of businesses attempted to recruit last quarter and 69 per cent of those experienced recruitment difficulties.
This is slightly down from our highest figure this decade (we hit that with 76 per cent in Q4 2021) but still substantial compared to recent trends.
Why is this? Where have these people, previously so readily available, gone?
According to analysis by the West Midlands Combined Authority the regional employment rate for the West Midlands continues to increase. From November 2021 to January 2022, it reached a record high for the region (75.7 per cent) – above the UK average.
There’s even good news on youth unemployment. Across the region. over 2.8 million people aged 16-plus are in work - nearly 30k more than pre-pandemic.
However, there’s also been significant numbers leaving the workforce too – particularly among older workers where a mix of personally positive (retiring early or scaling back hours to do other things) and negative (health – long Covid in particular is a real issue) along with other factors such a smaller population in the UK and young people are spending more time in education.
Many firms I speak to report a drop in availability of overseas skills and talent too.
All these factors combined have resulted in an estimated 1.2 million fewer people in the labour market than if pre-pandemic trends had continued.
That’s a lot of people. Having the right people, with the right skills in the right places is critical for the success of any organisation so this recruitment conundrum has serious implications for individual businesses’ productivity and economic growth more widely.
In this context, it’s not surprising that businesses are very interested in sharing intel on “what works” on attracting, retaining and developing people. Last month we held our annual Growth Through People campaign which, as the name suggests, is all about leading and managing people.
Eighty per cent of attendees surveyed said they learned something new they will be applying in their role or organisation.
Hot topics included how to do diversity and inclusion well, creating spaces for meaningful conversations with staff about topics like identity and mental health, the future of hybrid working and of course – attracting and retaining people.
We’ve also seen a commitment to engaging talent in practice through the Future Faces Chamber of Commerce, our division for young professional networking and development.
It’s grown at record pace in recent months, in a large part from organisations purchasing memberships as part of talent retention and development strategies. Access to training to help enable people with the right mindset for a business, but perhaps lacking the right practical skills is critical too. The skills landscape can be, let’s say, “complicated” in the UK but it is also well worth employers’ time looking into the range of funded and part-funded support to help develop workforces.
From “Help to Grow” for senior decision makers (almost a mini-MBA for SME business leaders) to the WMCA Apprenticeship Levy Transfer Fund (funding for SMEs training – yup, apprentices), there’s quite a bit out there.
On Wednesday I took part in a Birmingham Tech and West Midlands Combined Authority event on digital transformation and tech skills support (a critical area of focus for many businesses) and the range of stuff out there locally from quickfire bootcamps to FE and HE qualifications was impressive to say the least.
Business engagement with education more widely is also growing in importance.
This is an area where I’m always struck by how much enlightened self-interest there is in businesses getting stuck in to.
From a quick careers talk in a local school right up to a year in industry placement for a university student, engagement with education is a brilliant way to raise awareness of your industry, profession and specific business with potential future recruits and build some of that future talent pipeline.
On the social impact side, school age children in particular have been hit hard by the pandemic disrupting a crucial time in their education and development making this engagement more important than ever.
While there are some great opportunities out there for building talent pipelines, it doesn’t solve the immediate pressures facing businesses struggling to recruit or facing unsustainable pressure to compete on salaries now.
It is very clear that Government intervention is needed too on areas such as funding access to rapid retraining for in demand skills areas and wider availability of temporary visas.
At the Chamber, we’re continuing to team up with the British Chambers of Commerce and Chambers across the country to shout out for our members’ needs in this space.
Where have these people, previously so readily available, gone?