What were the biggest hiring issues for HR in 2023 and what can be done about them?

A survey of people and recruitment professionals found a host of factors are contributing to the current glut of unfilled vacancies

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Nearly four in five HR and recruitment professionals said that poor quality applicants and skills shortages were the biggest challenges they faced when recruiting in the past 12 months, a new survey by XpertHR has revealed.

Of those from the 175 organisations surveyed, 78 per cent said the biggest difficulty they had to overcome when hiring was the poor quality of applicants, while 77 per cent said skills shortages. 

It comes as the UK is believed to have as many as one million unfilled vacancies - largely due to a shortage of suitable candidates to fill the roles.

The CIPD’s latest Labour Market Outlook found that a quarter of businesses are considering using automation for hard-to-fill vacancies.

Many Watson, director of Ambitions Personnel, told People Management: “It is undeniable that there has been a skills shortage within the past year. There are multiple reasons for this; for example, many industries have experienced rapid technological changes, making it harder to find candidates with the latest skills. Plus, those who are skilled are switching jobs less.”

Liz Sebag-Montefiore, director and co-founder of 10-eighty, said: “Candidates have the advantage in an employee-led market.”

She added that skills shortages are an ongoing challenge: “This is a largely societal and political issue, but politicians like to blame businesses for not investing in their workforce, while not incentivising businesses to train employees.”

The survey also found that nearly half (44 per cent) of respondents said they struggled to compete with competitors’ pay and benefits packages, while a quarter (26 per cent) had difficulty with retention of new hires.

In order to address skills shortages when hiring, three in five (58 per cent) HR professionals said they were offering more appealing pay and benefits, while half said they were offering better pay to help retain current employees. 

David Morel, CEO of Tiger Recruitment, told People Management: “Many employers struggled to find staff in 2022, and some have since implemented retention bonuses. One recent example we saw was a 30 per cent retention bonus after a three-year commitment to the position. Obviously, this will impact available talent on the market.

“If good people are getting a better offer elsewhere, that’s where they’ll go in the current market,” said Sebag-Montefiore.

She recommended that businesses consider their “employer brand and reputation, corporate culture and the employee experience” as well as the remuneration they offer, in order to make their positions appealing to skilled candidates.

Morel added: “Jobseekers are feeling the effects of the cost-of-living crisis, so many are applying for roles at salary levels they might not have the required skills for.”

He said employers could instead offer other financial benefits to candidates if they are unable to meet the salary demands, such as childcare vouchers, season ticket loans and private healthcare. 

The survey also found two in five (43 per cent) said they were addressing skills shortages by offering enhanced training programmes to upskill current employees. 

Skills shortages were particularly challenging in certain areas - the vast majority (88 per cent) of employers struggled to find applicants with specialist skills, while over a third (37 per cent) had difficulty recruiting those with leadership skills. 

Sebag-Montefiore advised employers to boost their retention through offering training opportunities. She said: “A culture of continuous learning and clear career paths for employees are critical. 

“Not only will such measures provide them and the organisation with the skills needed, but it will help to satisfy and engage employees, which in turn enhances retention.”

Jo Benelisha, director at Strictly Recruitment, highlighted the impact of lengthy application processes on attracting the best candidates. 

She told People Management that businesses should “streamline the recruitment process to minimise delays” as “long and complicated processes may discourage top-tier candidates.

“Regularly reassessing and adapting strategies based on feedback and market trends is crucial in navigating the dynamic landscape of talent acquisition,” said Benelisha.

Watson added: “The ease of applying to multiple jobs online through sites such as Indeed can inevitably lead to a higher number of application forms from candidates who may not thoroughly match the job requirements.

“When advertising for a job, ensure the posting is clear, concise and accurately reflects the qualifications needed.”