6 key components to shape your talent strategy
I recently attended a really interesting seminar, led by Alastair Blair of thePotentmix, at the SE Scotland CIPD recruitment group in Edinburgh and wanted to share the following takeaways from that evening. We know that current skill shortages mean finding the talent needed to grow and develop a business requires real recruitment expertise and experience. However, to understand the challenges recruitment faces in the next few years we have to look at the bigger picture - the macroeconomic and social variables and their impact on inhouse and external recruiters.
There are several, interrelated factors which will influence future recruitment markets. These are: demographics; flexible working; millennials; Brexit; technology and the next recession. In addition, Alastair suggested that Google for Jobs (which we wrote about in our blog in August so I’ll omit any discussion of that here) is also likely to have a significant effect. Let’s look at these in a little more detail.
Firstly, the Demographics of the country means that there will be relatively fewer people available to work in the near future. At present, about a third of the UK’s workforce is over the age of 50 (c. 10 million people). This group – including many highly skilled professionals – is approaching retirement, which will only exacerbate an already acute skills shortage across many industries. Pension schemes are being rendered unsustainable as additional funds need to be put away each year to manage future liabilities.
"As the pool of available workers ages, businesses will need to ensure they retain their key talent and skills. An easy way to do this is to keep older employees working for longer. That goes against the grain for many recruiters and employers who have traditionally looked to the younger generation to fill their jobs. This engrained ageism needs to change."
The Millennials, on the other side of the generational divide, create other challenges. More and more, professionals (roughly 18-35) are reticent to be part of companies, who in their view, are behaving unethically. If you want to be an employer of choice - you’ll need to demonstrate that you share their approach to life. However, some 83% of Millenials want to be entrepreneurs, so clearly money is still a motivation - but of course, this means that they’re not going to be available to become a stereotypical employee.
At present, some five million people are self-employed. Businesses like Flexible Working – to be able to hire self-employed people on short-term/part-time contracts to reduce costs. Consequently, the demand for interim workers is increasing across the economy as a whole.
Another reason for the rise of self-employment is that people are seeking to improve their work-life balance. In fact, Alastair pointed out that the vast majority no longer works the traditional 9–5 day; they either work much longer or flexibly in shorter bursts. Moreover, our aging population increasingly requires their (working) offspring to take time off to care for them, further reducing their hours to their employers.
"Mid-career professionals are opting out, discovering they can earn enough to live comfortably but without all the hassle of commuting, office politics, etc. All this further reduces the pool of candidates for ‘normal’ jobs."
Does anyone really know what’s going to happen with Brexit? No, neither did anyone at the seminar. It might go hideously wrong. It might be more successful than perhaps most might expect. For some sectors, the shape of our post-Brexit immigration policy will be vital. But, given the way it’s been going, it’s anyone’s guess. However, we were encouraged not to see it as an isolated event. Accentuate the positive was the message – there will be opportunities as well as problems.
All the above assumes that algorithms and robots don’t take people’s jobs first. Technology, whether the first industrial revolution’s steam engines or the next industrial revolution’s AI and blockchain* makes radical change possible. That change includes the possibility that some 10 million jobs might be at risk, but what matters for recruiters is the speed at which this plays out over the next few years. Alastair foresees a big debate about the nature and time of work, not only in relation to flexible working but also the recent focus on the potential benefits of adopting a four-day working week.
A Recession is overdue. Most current “experts” (the same people who missed the last one!) think it’s likely to be in 2020 (or sooner if Italy falls apart). The employment market will, of course, be considerably affected. That said, unlike previous recessions, in 2009 the government and business strove manfully to keep people in work. That helped keep unemployment down, but it also contributed to the low productivity we see today: this time it may be that all our defensive ammunition (more QE anyone?) has been used up and the jobs market suffers as a result.
When we look at the bigger picture, it’s clear that recruitment is going to become more difficult over the next few years, for all the reasons given above. However, Alastair was at pains to stress that quality recruiters will thrive if they can demonstrate that not only do they understand the background to the market but they also know how best to respond to it and continue to deliver the candidates their clients/employers need. Amen to that!
Douglas Cross, Director, Denholm Associates
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