There are 1.8m job vacancies – but who will fill them?

According to a recent report in City AM, there were 1.8m job vacancies advertised in the UK in the week to May 1st, up roughly 15% on the same period a month earlier.

The report stated that recruiters were ‘in overdrive’ as they struggled to fill the vacancies, with Neil Carberry, Chief Executive of the Recruitment and Employment Federation (REF) saying: “‘The data continues to show that employers across the UK are eager to hire new staff.”

Surely that has to be good news, on top of the near-30m that are already on UK payrolls.

There is a problem though. A few weeks after the initial report, the REF was back on the pages of City AM, stating that an ‘increasing skills shortage’ could hit companies’ growth. Neil Carberry said: “Labour supply is the big issue we have to solve.”

Recruitment companies were blaming a lack of candidates – specifically, a lack of suitably qualified candidates – for their inability to fill vacancies.

Let’s now leave the UK, and travel over to California, where companies are increasingly demanding that employees return to the office. Tesla boss Elon Musk was unequivocal, stating that everyone must do a minimum of 40 hours in the office every week. ‘If you don’t show up,’ he said, ‘We’ll assume you have resigned.’

Apple also issued the same edict – and immediately ran into trouble, with suggestions that half of all their staff may opt to leave rather than face a full-time return to the office.

Clearly people have got used to very different ways of working during the pandemic. For employers – and by extension for the economic recovery of the UK and world economy – these changes to ways of working, and what employees now want from a job, are going to cause problems.

Employees – especially Millennials and Generation Z which follows them – want very different things to their parents’ generation. They want to work for companies that share their values and don’t necessarily see salary as the key factor in a job. Reports that ‘millennials want nap time and pets at work’ may be slightly exaggerated, but there’s no doubt that having experienced working from home, a significant number have no wish to go back to commuting – as Apple are now finding out.

It means that employers, and the recruitment firms working on their behalf, will have to offer more flexible pay and benefits packages. They may well have to accept working from home for at least part of the week – and offer significant training to beat the skills shortages.

With the war in Ukraine, continuing supply chain problems and inflation hitting operating costs, finding the right staff is another big problem for employers to deal with. Hopefully they and the recruitment firms solve it, as the UK’s continuing economic recovery may well depend on it.