Recruiting in a candidate’s market – challenges and pitfalls for recruitment and retention in 2022

Employee recruitment and retention is fast becoming one of the biggest business challenges in 2022. The perfect storm of economic uncertainty, coupled with a cost of living crisis and an acknowledged skills shortage, has seen employers across the country struggle to attract candidates for vacancies. It’s a candidate’s market.

In fact, the UK economy is experiencing its worst labour shortage since 1997 (think Tony Blair’s landslide victory and, perhaps even more infamous, ‘Barbie Girl’, by one hit wonder, Aqua).

According to the Recruitment & Employment Confederation latest Labour Market Tracker, there are currently 1.85 million active job postings, a figure that has been rising since mid-June.  And with supply grossly out stripping demand, prospective employees can afford to be picky, and that simply means increased costs for businesses.

Gone are the days where employees can be tempted away from their job for a simple increase in salary. Employees want – scrap that, expect - a much broader smorgasbord of employee benefits on the buffet table.  

Whilst you may think your business is doing all it can by offering inflation beating salary, flexible working and an inclusive culture, this is now seen as a basic expectation for candidates, akin to a company offering “benefit” of 28 days annual leave.  Increasingly employees are asking about lesser-known benefits such as gym membership, low interest loans for car or property purchases, access to mental health services and private medical. One client of ours has even been approached by employees to consider offering egg-freezing as a benefit. Employers, particularly those with finite budgets, need to keep up with demand and be creative with their offering as well as ensuring there is a clear plan to retain their best performers. 

And it is not only recruitment where employers are struggling. Retention of key staff is another headache facing businesses. Over the last 12 months, internet searches for ‘work progression´ have soared by 200%. When employees work hard and aren’t rewarded with the opportunity to progress their career, naturally they won’t hang around.  Employers must consider career development as part of their recruitment strategy and onboarding process.  Employees want to know what their next development opportunity will be (and when) and not making this clear can be costly from the outset.

Data also highlights a growing desire for employees to be adequately compensated for hard work. This is hardly a ground-breaking discovery but searches for ‘rewards in the workplace’ have increased by 67% over the last year. Rewards can be anything from formally acknowledging an employee’s work (but let’s not reinstate ‘employee of the month’ anytime soon though, eh?), to financial incentives, access to health and wellbeing services or team activities.

One of the worst culprits to retention is ‘micromanagement’, with Google search volumes showing a 40% surge in searches since April 2021. If you’ve gone though a suitable recruitment process, you should have enough confidence that the person you’ve hired is competent to perform.  Teaching someone the ropes is one thing, overzealous micromanagement is quite another.

In a candidate’s market, employers need to consider the old adage: “do the basics well”. Provide training and career development opportunities, if you can provide access to a variety of benefits (focussing on employee health and wellbeing initiatives given their growing prominence).  Recognise individual achievements, provide feedback (good and, well, less good) and most importantly think about culture. To quote the legendary Peter Drucker: culture eats strategy for breakfast!

These notes have been prepared for the purpose of articles only. They should not be regarded as a substitute for taking legal advice.