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

Experts warn that a shortage of workers is ‘testing the resolve’ of employers as supply dropped sharply at the end of 2021

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

Demand for permanent and temporary staff continues to rise while candidate availability is falling, a poll of employers has found.

While the rate of vacancy growth softened slightly to an eight-month low in December, there was still ‘robust’ demand for candidates, the latest KPMG and REC UK Report on Jobs survey has found.

At the same time, the supply of candidates fell sharply at the end of 2021, albeit the least severe drop since April last year, with recruiters polled noting that uncertainty around the pandemic, as well as a low unemployment rate and fewer foreign workers, had affected candidate numbers.

Claire Warnes, head of education, skills and productivity at KPMG UK, said many employers were feeling the pressure from rising demand for staff, which was likely to affect businesses’ operating costs 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.

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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."