The tightest labour market in living history and how to handle it

It’s official, the current recruitment landscape is as challenging as it has ever been. We’re now established in a ‘pay-to-retain’ talent cycle against a backdrop of a fresh record high of job vacancies – the last official statistic was an astounding 1.3m.

This is the verdict of Gi Group owned Encore Personnel.

The company has done the research so you don’t need to Google the numbers and we’re sure board meetings, weekly team meetings and status reports are dominated by this theme. The daunting fact is that wages are now lagging behind the cost of living when inflation is taken into account. In Q4 of 2021, according to ONS figures, pay fell by 0.8% on the previous year. In the 12 months to December, inflation was up by 5.4% with the Bank of England forecasting it could hit 7% this year. Some really challenging data which inevitably comes coupled with some tough decisions for businesses.

This is the main reason why Encore has decided to reboot its Labour Report in a bite-sized, easy-to-digest format that gives pointers on what’s to come and how to adapt when it comes to sourcing employees.

Encore know so many businesses have got a major headache in the staff retention department. Record vacancies mean workers are in the driving seat as employers want to keep their excellent people in place – so pay rises are not only expected but becoming more than routine.

This is costly for more reasons than the obvious, but what is certainly more costly is having to repeat this process month in month out as a result of a revolving door-system of colleagues. Consultants are well aware of workers at the lower end of the pay grade moving for 50p an hour increases, which on paper might sound incredible, but in reality makes a whole lot of sense.

Note – Encore Personnel was acquired by Gi Group Holding in October 2022