Recruitment and retention in 2021: Is it an employer’s market?

Unemployment rate

With 1.72 million people unemployed between September and November, many would assume that it is an employer’s market right now. Companies planned a record number of redundancies last year – 800,000 according to a BBC Freedom of Information request to the Insolvency Service. As many seek employment during the pandemic, employers would surely expect an influx of candidates to choose from. However, the correlation is not quite that straightforward.

The right skills

Whilst flexible working may enable employers to access a wider talent pool, employers have spoken about how they have struggled to recruit the right talent in our HR Groups. This particularly surfaced in the Healthcare sector, which may be exacerbated further by the one per cent pay rise for NHS workers recommended by the Department of Health and Social Care. The proposed pay deal for NHS workers is criticised as ‘bitterly disappointing’ and the ‘worst kind of insult’ by the Unions. There is a delicate balance to be struck between an ‘affordable’ and fair pay award – the Secretary of State spent the weekend justifying the proposed increase whilst Unions are preparing to resist the proposal with potential strike action.

Demographic impact

Whilst some employers are taking a stronger stance in relation to staff coming into the office, it is important to both set expectations for the long-term and help manage the return process in partnership with employees. Many organisations supported their employees during the last return to the office over the summer and into September by providing health and safety videos to get employees comfortable with the notion of how the office had changed, stepping up pulse surveys to capture employee reactions and increasing employee communications to signal support.

The road to recovery

The redundancy rates during the pandemic have increased faster than the economic crisis of 2008. Administrative and support services had the official highest redundancy rates, and Associations and Institutes and Construction reported high levels of redundancies over the summer. Hopefully we have seen the height of those being furloughed and those being made redundant during the pandemic and we are approaching a period of recruitment and renewed economic activity. The vaccination rollout has been widely hailed as successful – we hope the current plateau in redundancies can now be sustained as the economy reopens. The Office for Budget Responsibility (OBR) has forecast a “swifter and more sustainable recovery” than previously expected in November 2020. The economy is predicted to return to its pre-Covid levels by the middle of 2022, six months earlier than previously thought. Later in the year the focus may shift for employees – with more financial stability, the labour market may see greater buoyancy.

Get in touch

So, is it currently an employer’s market? This depends on the sector you operate in, the skills you’re seeking and how strong your employer brand is, in order to attract the right candidates and keep the talent you have.

With the vaccination programme well underway and the road to recovery laid out, people can start to see a way out of a difficult year. We anticipate that the labour market will be buoyant if the recovery roadmap comes to fruition. But employers need to be wary of their approach – and look at their past, their present and their future actions.

As we start to come through this, people who have been unhappy with employers over last year are likely to feel the impact and make a choice. Equally, those employers who have built a culture that has thrived on open communication and driven employee engagement throughout this period will reap rewards in the candidates they attract. Call us today if we can help you support your people strategy and define your approach post-pandemic.