Dave talks to Kevin Green about the 3 types of labour shortages, the evolution of the labour crisis, flexible working as a key differentiator, the importance of adding value for recruitment agencies, utilising data to gain a competitive edge, adaptability and how to be a consultant.
The One Where They Talk About…
- The 3 types of labour shortages
- The evolution of a labour crisis
- Flexible working as a key differentiator
- The importance for recruitment agencies of adding value
- Utilising data to gain a competitive advantage
- Being a consultant and not just a recruiter
- Adaptability and agility as crucial components for growth
In Episode 216 of the Talent Matters podcast series, Wave CEO Dave Jenkins chats to experienced business and HR leader Kevin Green. Currently Chief People Officer of First Bus, he is concurrently Chairman of Timewise, Strategic Advisor at FRS Recruitment, Founder and CEO of What’s Next Consultancy, and a Non Executive at Gobeyond Partners. With a wealth of knowledge and experience in the industry, Kevin is also a TEDx speaker, commentator, blogger and author. There is no-one more qualified to talk about the job market and a recruitment agency’s place in it.
It’s a hugely insightful chat dissecting the different types of shortages in the labour market, what employers and recruiters can do in the face of immense challenges, and how recruitment agencies can differentiate themselves in a highly competitive market. If you haven’t managed to catch the podcast, we recommend that you do. In the meantime, we have collated the key takeaways below.
The 3 types of labour shortages
The focus on encouraging people back into the labour market in this year’s Budget showed that the government is recognising the challenges in the labour market. There continue to be low unemployment levels and high vacancy levels, resulting in a labour market that’s incredibly tight. We are facing 3 different types of shortages:
- Labour shortage – these are jobs where people don’t need previous skills or qualifications and can be trained on the job, examples of which can be found in industries such as Manufacturing, Agriculture, and Hospitality. In these cases, employers and recruiters are just looking for candidates with the right work ethic to turn up and get the job done.
- Skills shortage – this shortage is more pronounced and will be longer term. This is where there are not enough people in the labour market to fill the jobs available with the right experience and skills. Examples of skills shortages can be found in Digital, IT and Engineering. There are more vacancies in those areas than there are people with the required skills and experience in the labour market. Kevin notes that these shortages have increased manifold since his tenure at the REC 5 years ago.
- Talent shortage – Kevin terms talent as skills+, i.e. a person with the right skills and experience but who is also change-oriented (they can handle and deliver change), someone who can think strategically but roll their sleeves up and get the job done, and someone that can lead, motivate and inspire.
First bus is experiencing all 3 shortages – a labour shortage with drivers, a skills shortage with engineers, and a talent shortage with head office – and Kevin is very aware that there are many other businesses in the same boat. In fact, most employers are struggling with at least 1 if not 2 of these shortages. The consequence? Businesses must work harder on retention, attraction, and hiring.
A labour crisis
Brexit and COVID certainly played their part in driving the shortages in the labour market but they exacerbated a deep-seated problem that already existed. The UK was already experiencing a tight labour market going into the pandemic, largely due to higher sickness rates, people retiring early, and people studying, plus not enough people learning certain skills. Kevin doesn’t beat around the bush when he says, “it is a fundamental crisis,” remarking that over his entire career there have never been more vacancies than unemployed people – until recently.
Flexible working a key differentiator
In a market characterised by skills and talent shortages, roles that offer flexible working will give clients a competitive advantage. However, employers must view flexible working as more than just location flexibility – and this is where recruiters can advise their clients and truly add value. Other types of flexibility are just as important – the 4 day working week is an incredibly interesting movement, and there are annualised hours, shorter hours, term time only, and much more. Don’t forget part-time work, which can help a huge number of people get back into the labour market. A huge 8.5 million work part-time in UK – 1/3 of the workforce. And yet only about 30% of jobs offer flexible working. Clever employers and recruiters will talk about time flex as well as location flex, particularly if their industry is suffering from acute skill and talent shortages. What’s key is to be crystal clear that flexibility is offered on your job adverts – this is what candidates are looking for.
Recruitment agencies that add value have a great opportunity
Recruitment agencies have a role to play in many different parts of the labour market but they must add value and truly understand the market as well as the client’s offering. They need to be able to bring candidates to clients that they can’t source themselves. In an era of shortages, agencies have a great opportunity to show they can reach the labour market and candidates that employers haven’t got the time and/or ability to do themselves. If you’re running a recruitment agency, your recruiters need to be doing outreach around what candidates want – talking to candidates, doing surveys, producing data – the latter of which is one of the big value-adds.
Data can be a recruiter’s secret weapon
The ability to source and/or produce, plus dissect and break down data for clients can be a key differentiator for recruiters. Agencies need to be looking at a client’s offering against direct market competitors, finding market data, geographical data, and the candidate perception of that organisation. There’s a lot of publicly available labour market data but taking that data and making it meaningful to clients is incredibly valuable. Helping clients to understand the market and what candidates want will help them to get better at attracting quality candidates. As well as bringing candidates to clients, recruitment consultants should be providing data and insight about what’s going on in the marketplace and where their brand fits in. Employers will look through a lens of what they’re seeing in the labour market and so appreciate independent market advice. There are huge opportunities for agencies that do this.
Recruiters need to be consultants
If an employer can post an ad on LinkedIn or Indeed and get high quality candidates, why would they bother with an agency? Recruiters need to be clear on the value they add and part of that is acting as interpreters between candidates and clients. They need to be able to extrapolate from candidates what they’re looking for and take messages back to employers. Honest feedback from candidates is vital – don’t sugar-coat anything. Tell clients how their brand is perceived, what candidates are saying, where they stand compared to competitors. And then help them to improve on their offering.
Adaptability and agility are key to growth
There won’t be a flood of candidates into the market from redundancies – this will be a very different type of recession. Employers learnt valuable lessons from the pandemic and will think long and hard about letting people go. Both recruiters and employers need to behave in a more adaptable and agile way in order to survive and grow in such a tight market. The recruitment process shouldn’t take as along as it does, candidates should hear back from recruiters quickly and be kept warm if there are any delays. Ultimately, in a skills-short market others will move faster and counter your offer at pace. The market has changed, candidate expectations have changed and if you’re still doing what you did 5 years ago you’ll not flourish and grow.
And for the important foodie question…
“If entertaining, I’m dependent on my wife as I’m not a great cook. I like restaurants a lot and am a big curry fan so I’d go out. I like taste, I like spice, and I like a high quality Indian restaurant that offers something a bit different. My three favourites in London, where I live, are Veeraswamy on Regent Street, Chutney Mary in St James’, and The Cinnamon Club in Westminster.”