Friday 29th March 2019
The Recruitment Industry Today
Finding the right candidates for your business.
Seemingly unshakable, the Recruitment industry has stood the test of the recent political rain cloud. The global economic gloom did not bring it down. Brexit did not shake it.
In fact, the industry is better than ever.
Driving the UK jobs market, annually it brings in a massive £35.7B beating advertising, arts & culture, even the food & drinks industry in terms of economic contributions.
With a pretty consistent year on year growth rate of 9%, it’s not too shabby an industry.
Whilst Recruitment agencies are doing well, are UK businesses enjoying the same levels of success?
With a history of reacting, adapting and thriving when many other parts of the UK economy are struggling, Recruitment agencies are resourceful, to say the least.
In this article, we will be looking at how employers can overcome shortfalls and likewise grow, touching on the recruitment of active and passive candidates.
Skills Shortage vs. Economic Growth
Despite wages in the years following the financial crisis seeing more ebb than flow, an upturn towards the end of 2014 was welcomed news.
Ever since, one of the major priorities of the government has been to tackle both low productivity and the lack of skills in the UK market. Brexit, should it go ahead (though at this point how it’ll pan is still anybody’s guess), is likely to make it harder for British companies to import workers that would fill skill shortage voids.
When employers put out the recruitment call to fill empty seats, it may be an expansion of skills, experience or further qualifications that they’re after. But occasionally employers find they’re hard-pressed to fill these “skill shortage vacancies” for reasons irrelevant to the lack of skills. These reasons might be the lack of applicants for a specific job (perhaps a result of mis-advertisement, location or just a fact that some skill sets are more niche than others), issues with candidates’ attitudes, motivations or personalities, or even limitations in the recruiting organisation itself.
Impact of skill shortage vacancies on employers
Often in companies where skill shortages exist, the impact on the company as a whole is far from desirable. Not only can the increased workload on existing staff lead to grumbles to the tune of “well it’s not my job to do it”, a rise in stress or a dip in quality of output, but it also puts a plug in the development of new products/services because everyone is tied up just trying to meet quota.
Furthermore, companies with this shortage reported direct financial impacts, such as the loss of business to competition, increased operating costs and output delays, as well as difficulties adapting to technological change. All round, a nightmare for scalability.
Small firms with 5 employees or less are of course more affected than large establishments with 100 employees or more, and the variation of the impact of skill shortage by sector is an interesting one.
In recent years, the Recruitment industry experienced a shift from an employer-driven market to a candidate-driven market. Why?
- Plunge in unemployment
- Increase in turnover rates
- Companies not raising wages causing employees to find better-paying jobs
- Rise in Recruitment industry resulting in more job openings
- The war for talent, with companies fighting with competitors for a truly attractive offer
- Adjustment of expectations in new talent generation (i.e. better employee benefit schemes)
With recruiting becoming more of a digital experience, technology gave the opportunity to job seekers to engage in platforms (LinkedIn, CV Library and Monster) and start updating their CVs, building networks and increasing their bargaining power when it comes to job offers.
Active vs. Passive candidates
When it comes to filling vacancies, generally job seekers are classified into two categories: active and passive candidates. These two types have distinct characteristics that define the recruitment strategy that has to be adopted in order to attract and, ultimately, hire where needed.
As you might expect, active candidates are the ones that are searching for roles themselves. That means they keep their CV polished and online, keeping up-to-date with the latest vacancies. A great Linkedin study about the mix, active candidates make up 15% of the UK and though actively job seeking, candidates in this category are not necessarily unemployed. Moreover, they often look for a job that rewards their talents, better suits their schedule or just wish to escape from a job they simply do not like.
Traits of active candidates:
- More likely to attend interviews on a flexible schedule
- More likely to start work on short notice
- On average, more likely to settle for a lower salary (compared to passive candidates)
To reach the highest quality of active candidates efficiently, recruiters may use industry-specific job boards, where applicable, while avoiding generic job descriptions. These candidates’ skills may not have been practiced for quite some time or they might generally be lacking experience. This means that investment on their training is needed, but, in most cases, talent never fails.
Passive candidates are not on the lookout for job opportunities. In most cases, they work in a job they are happy with, and are not planning to quit. Their CV probably predates their current role, but if a recruiter or a person proposes an attractive job offer, who wouldn’t consider it.
It takes a lot more time and effort to approach passive candidates, and many organisations do not consider it worthwhile despite hire quality being somewhat increased this way. However, several recruitment experts believe that passive candidates make the best hires. This is because they are more likely to have the exact skills the employer needs, plus they do not require additional training. On top of that, when passive candidates accept a job, it is because they are really interested in it but don’t necessarily need it.
To reach them, small businesses often opt for further support because as you may imagine it’s a more time-consuming and tailored task. Candidates have to be tracked via social media or other channels, and a consistent follow-up communication has to be maintained, either by email or phone conversations. Each of these steps takes time, considering that the approach has to be personalised and requires research on the potential candidate in order to establish a friendly communication channel.
If you’d like to find out more about the Rise of the Recruitment Industry or learn some tips about recruiting for your business, check out Recruitment Industry Today here or speak to an expert on 0116 340 3116.