Member Article

The pandemic has exacerbated the ongoing battle for talent, but whilst the Great Resignation is in full swing, the Great Reprioritisation is only just getting started.

In 2021 a study by Microsoft found that 41% of the global workforce was considering moving on from their current employer. This figure coupled with a record 1.2 million UK job vacancies reported in September 2021 (an increase of 50% compared to pre-pandemic levels) demonstrates that the Great Resignation may now be in full swing. This phrase has been used to predict the mass exodus of employees from their current roles in response to the COVID-19 pandemic. It focuses on the general view that many employees did not feel secure enough to leave their jobs during the height of the pandemic and as a result, a build up of resignations has been created.

In some sectors such as technology and engineering, there has been huge growth during the pandemic but these sectors are faced with a limited pool of talent with the necessary skillset to fill roles. This has led to a heightened battle for talent and there has been a rise in competitive poaching between businesses in these sectors. Other industries such as the public sector and healthcare sector have had a different experience with limited pay rises, under-resourced working environments and over-worked patterns. This has led to employee dissatisfaction, with many choosing to resign and retrain in other newer sectors to protect their own long-term prospects.

Whether it is disruption caused by the pandemic, the shift in landscape that Brexit has brought, the introduction of new legislation such as IR35 or just a general change in worker mindset, the challenges of recruitment and retention have been felt universally across all industries and sectors in the past year. It isn’t all doom and gloom as it is still a big decision for most employees to take the plunge and leave, particularly if it means changing sector and/or re-training. However, it is clear that the time to act is now if you want to retain employees. Whether it is pressing the reset button, re-evaluating the direction of the business or just becoming more aware of employee expectations, employers need to reassess their organisation and workplace culture in 2022 to futureproof their business.

“A nation’s culture resides in the hearts and in the soul of its people”

Unquestionably, COVID-19 has created a shift in the way that individuals view their employment with a flexible approach now becoming a non-negotiable term for many. People are searching for businesses that align with their own lifestyles to enable them to “work to live” rather than “live to work” which has sadly been the case in many industries for the past few decades. This has caused many to refer to the current situation as the Great Reprioritisation.

As businesses chase many of the same skilled employees, salary increases within the private sector have become a short-term immediate lure to attract talent. For example, in the technology industry salary increases have increased by up to 50% for those with software development or cyber security experience. But is continuous salary inflation sustainable? No, it clearly isn’t. Whilst it might help paper over a short-term problem, employers are encouraged to carry out “root cause” analysis to ensure that they aren’t just treating the symptoms of the problem but are instead looking deeper for a proper resolution. For businesses to really thrive in current conditions employee engagement will be key to long-term success. The most important aspect of employee engagement is cultural considerations, embedded within both an employer’s business and their recruitment processes.

To achieve this, employers should foster an environment that puts employees and their well-being at the centre of decision making. Ask yourselves:

• Do you know how your colleagues or workforce feel on environmental matters?
• Do you know how important they would rank social responsibility on their list?
• What about diversity and inclusion?

These are all topics which employees care about and at this very moment candidates are searching for new opportunities, for a role that allows them to work flexibly at a firm that they can identify and engage with. Is salary important? Yes, of course but it is no longer the main driving force behind people’s decisions to stay with or join a business. The pandemic caused a seismic shift in prioritisations – some might say a Great Reprioritisation.

Practical considerations when recruiting

It would be simplistic to say that recruitment and retention challenges have been caused only by the global pandemic. There are a multitude of complex and sector-dependent factors that have all collided simultaneously to create a perfect storm. Many believe that we are yet to really feel the full force of Brexit whilst changes to IR35 have disrupted certain sectors. Then we have the generational issue of the ageing workforce and a perceived black hole of management and leadership skills in the younger workforce. Employers can take practical steps to counteract these influences but it also will involve tough decisions and changes in outlook.

Employers may look to take a skills-based hiring approach to ensure that people are hired based on their potential rather than trying to scoop up the benefits of their past experiences. Applying this method will assist in making employees feel valued and invested in and it also widens the potential pool of talent for a specific role. 
Similarly the increase in remote working can help to remove geographical boundaries to recruitment and increase opportunities for those who ordinarily would not have been considered. Although bear in mind that if recruitment extends beyond the UK then local legal advice should be sought to understand the employment law, tax/social security and immigration implications of working in the host country outside of the UK. For our podcast on global mobility, please click here.

Immigration hurdles

It would be remiss not to mention this hurdle, not least because it’s a pretty high one. As a result of Brexit and the loss of free movement, many EU nationals now require a visa to work within the UK. This has driven a huge increase in Skilled Worker applications (formerly, Tier 2) with 61% of all work-related visa applications being made under this route so far this year alone.

There is also now a lower skill and salary threshold under the Skilled Worker route which has meant that more roles are eligible for sponsorship than ever before. Many employers are therefore using this to access overseas talent and manage their skills shortage. But employers need to be alive to the administrative burden and challenges attached with hiring from overseas. The time taken to do this needs to be factored in - sponsorship licence applications are taking the full 8 weeks and individual visa applications, potentially up to 8 weeks. In addition, the costs attached to these applications can make it an unviable option for some organisations for example, the immigration skills charge for medium/large employers is £1,000 per year. It also means that employers need to understand the sponsor duties and record-keeping and monitoring duties attached to the licence to stay complaint whilst being over mindful of the possibility the Home Office may conduct a sponsor compliance visit.

Some sectors such as farming and haulage were heavily reliant on EU-workers pre-Brexit. Many considered these jobs as low paid and low skilled and as a result they haven’t met the sponsorship requirements under the Skilled Worker route, meaning businesses cannot recruit as before. The UK government has introduced temporary visas on a fixed term basis to plug some gaps but that is not a viable long-term solution so what can businesses in these sectors do? Unfortunately, it means that businesses need to make jobs more attractive to workers within the UK whether that be by way of improvements to working patterns or instilling a culture within the business. Alternatively it means concentrating on educating the public on their sector or focusing on lobbying government for more permanent visa route options.

It is expected that the Home Office will introduce a variety of new visa routes in Spring 2022 to address some of the issues experienced in 2021 but the details are limited, and it is a case of watching this space!

Looking to the future

To improve recruitment and retention levels and to futureproof their businesses employers are urged to:

• Invest in training and development opportunities in a bid to reskill or upskill their existing pool of talent rather than simply seeking to hire staff externally
• Offer a flexible working model that caters for all different lifestyles, working patterns and preferences
• Improve technology to allow employees to enjoy their working experience and become more productive at optimum times
• Have a clear identifiable culture which employees can buy into and become part of
• Communicate expectations and values to prevent disengagement and employee dissatisfaction
• Stay authentic and avoid making promises that cannot be delivered on
• Take a clear stance on social justice movements, equality and inclusion, the environment and any other cause which employees hold dear to them and
• Listen and engage with employees and, in turn, employees will listen and engage with businesses.

Whilst the current movement within the labour market will start to slow as the impact from the pandemic and other factors level out, it is unlikely that employees will simply accept a return to their old ways of working. Employers should use the current market conditions to their advantage and use it as the impetus to take positive steps to tackle the battle for talent. Whilst the Great Resignation might be in full swing, the Great Reprioritisation is only just getting started.