Skills shortages are a prevalent issue in the UK and globally, with talent development not keeping up with demand. The labor market has seen significant shifts, from the pandemic-induced hiring freezes to the Great Resignation, and now the trend of labor hoarding. Employers are increasingly retaining employees to avoid future hiring costs, exacerbating the scarcity of available talent.
The concept of labor hoarding, where employers hold onto their workforce in anticipation of market recovery, is believed to contribute to the declining number of job applications in key sectors. Although not definitively proven, the correlation between labor hoarding and reduced job seekers is evident, with significant drops in applications being reported.
UK’s Skills Shortage Worsens as Employers Hold onto Workers, Fewer Job Seekers Available.
Data from the financial services and legal sectors illustrate the severity of the talent crisis. Applications for permanent financial services roles dropped by 57% between April and May, while contract role applications fell by 62%, even as job vacancies decreased by lesser margins. Similar trends are observed in the legal sector, where permanent and contract job applications fell by 60% and 58%, respectively, amid smaller declines in job postings.
The persistent decline in job applications across multiple sectors signals a widening gap between supply and demand for skilled professionals. Despite signs of economic stabilization, this mismatch remains a concern. The recruitment industry faces challenges in addressing these skill shortages and needs to focus on creating a sustainable talent pipeline.
To address the skills crisis, staffing businesses must engage in long-term strategies rather than short-term candidate acquisition. Apsco and its partners aim to influence political decisions to prioritize skill development. Apsco’s manifesto calls for urgent reforms in training, immigration, and public sector recruitment to tackle the professional skills crisis in the UK. Collaboration with the new government is essential to implement these reforms effectively.
