Ask anybody in the industry about their biggest challenges and they will tell you that hiring is the hardest it’s been for many years. Companies are struggling to fill vacancies across the board and are having to try new methods to attract candidates.
So what is going on out there? NDA spoke to Ed Steer, Co-Founder and CEO of Sphere Digital Recruitment who talked us through the results of their recent survey. Part one follows with part two to come tomorrow.
We surveyed 29,556 of our clients and candidates in the digital sector to understand the key challenges they faced this year in the job market in comparison to previous years, such as Increased salary demands, delayed processes & WFH policies. We explored how our respondents dealt with working through the pandemic and reflect on the recommendations they made that can accommodate their needs whilst many are now returning back to the office.
Although the applicant pool has drastically increased in 2021, with “164,000 people voluntarily leaving their jobs” (Hireology, 2021); the conflicting matter is that companies with available vacancies are still struggling to fill these roles even though: “the number of vacancies in the 3 months to August has rose above one million for the first time since records began in 2001”. (BBC, 2021) Our report cited that 84% of our clients found there was ‘a lack of candidates’.
This report aims to identify and offer solutions to some of the underlying factors that highlight what issues the job market is currently facing in regard to employee retention and hiring processes.
We reflect on how the market has adapted to post-lockdown life in the UK, European and North American markets; We cover topics such as flexible working, online vs face-to-face interview processes, reasons for hiring, reasons for someone leaving their current roles and why businesses may be struggling to retain those who are already employed and how these factors have affected people’s mental health.
Vacancies at a record-breaking high
We surveyed 16,290 of our clients to identify how their hiring plans were affected in 2021. Companies have stated “there is a lot of movement and fewer junior candidates due to a lack of hiring in 2020 meaning it is very difficult to find people at the level needed. In addition, many businesses are counter-offering to keep talent which makes recruitment even harder”.
“The number of vacancies in the 3 months between June to August rose to above 1 million for the first time since records began in 2001”. (BBC News, 2021)
The majority of businesses we surveyed in the digital sector are recovering from the pandemic with 48% of these businesses hiring in 2021 due to growth from increased revenue.
Everyone that we surveyed hired someone in 2021: 73% stated their reason for hiring was for ‘expected growth’, 43% were ‘replacing headcount that was lost during covid’ and around 23% hired due to ‘launching in a new market or location’.
Candidates are seeking higher salaries and flexible work
We surveyed 13,266 people working in the digital sector and found that 47% are actively looking for a new role this year due to the furlough scheme ending, 76% are seeking better opportunities and 46% demanding higher pay.
52% of our respondents stated that they have been feeling ‘burnout’, with 40% saying they worked a lot more in 2021. This is a key area to consider for employee retention.
Candidates are prioritising flexible working (53%) and pay (73%) when we asked what the most important factor to them in a role was. One person mentioned “online interviews have made it hard to sense the office, environment and people” with 53% saying their interview experiences are lengthy as they typically go through 3-4 interview stages, which is more than previous years.
These statistics can reflect on how the majority of our candidates have been challenged this year when looking for roles in 2021 and what they felt companies can do to support them.
Reasons people moved and hiring challenges
A common theme presented in our results was candidates wanting ‘more flexibility’ as 45% moved to new roles for this very reason. 76% of individuals moved roles due to ‘better opportunities’ and 46% wanting a ‘higher salary’. 18% of our respondents were compelled to move due to ‘redundancy’ and the ‘furlough scheme’, bringing uncertainty to the future of their previous roles. One individual commented their reason for moving was “no room for growth in previous company” and wanting to be in a “more challenging environment”.
From our survey we have recognised that businesses are facing 2 main challenges when hiring in 2021: “a lack of candidates” was a consistent response from 74% of the companies and 39% said “candidates accepting alternative job offers”. Some of the reasons for this could be that candidates are having health concerns from the pandemic and the need for their salary demands to be matched. Due to these factors the “workforce participation rate has remained stagnant at about 61.6% for several months in 2021 and declined from 63% prior to the pandemic” (Hireology, 2021).
One of the biggest challenges we received from both sets of respondents the businesses’ needs to meet salary demands: over half (58%) of businesses surveyed struggled to meet salary demands. This can be seen as one of the biggest obstacles our respondents are facing in their hiring and
retention processes. As stated above, 48% of businesses main reasons for hiring were for growth that came from increased revenue. Although, it is vital to hire for businesses growth plans it is just as important to retain existing talent.
A way companies could eliminate the major issue of retention during a difficult period is to evaluate their existing employees’ needs (e.g., salary demands, flexible work and mental health). Finding the right balance between a business’s growth and retaining existing employees’ can be seen as challenging. However, in order to meet in the middle businesses should evaluate how their competitors are achieving growth and retention and for employees to demonstrate that they’re a valuable asset. Our results have shown 76% of our candidates say they moved due to
“better opportunity” this may be the reason 54% of our clients’ reasons to hire were due to replacing staff which wasn’t related to Covid-19.
Companies have the best shot at retention if they listen to and understand employees needs during a difficult period, offering flexibility which benefits both parties and accommodating to salary requirements. Companies may benefit by introducing ‘regular salary reviews’ which will keep employees motivated and offer flexible work – which have been two of the most important factors for our candidates this year.