The impact of the candidate shortages on recruitment

Businesses across all sectors have been facing staff shortages for some time now. With economic activity picking up at a rapid pace post pandemic, the demand for workers continues to grow. The candidate shortage has also been compounded by the fact there are less EU workers and so the longer the situation continues, the bigger the impact is on the wider recruitment market.

Having worked in HR recruitment for over 20 years, I have never experienced a situation such as this. Admittedly we have worked through candidate led markets in the past but for a shorter term and without the huge increase in volume of vacancies which we are currently facing.

Three stand-out impacts we’re currently seeing on the recruitment market because of the shortage of candidates are:


  1. Increase in starter salaries

New research shows that starter salaries for both permanent and temporary positions have risen at the fastest rate is 24 years.[1] While this is great for job seekers, it’s unlikely to be a long-term solution for business recovery. If all businesses are recruiting from the same talent pool, there will always be a shortage of skills unless companies invest in reskilling people. This is particularly true now that the furlough scheme has ended. There hasn’t been a sudden influx of available workers, instead demand has become greater in certain industries or certain skills have become more relevant and therefore candidates will need to diversify their skill set in order to re-join the workforce.


  1. More counteroffers

With competition for talent rife, we’ve seen a huge spike in the number of counteroffers when an employee hands in their resignation. This includes increasing their current salary, benefits and promises to improve working standards such as offering more flexibility. Counteroffers have always been around but they’re proving to be more of dilemma for candidates in the current market because there is a higher level of uncertainty around stepping into the unknown of a new role with a new employer. In our experience, people who do accept a counteroffer only stay with their employer for an average of 12 more months maximum, they’re simply prolonging the inevitable.


  1. Widening the candidate search

The pandemic showed us that remote working can not only work, it can widen the scope for accessing talent. Many employers are now open to hiring candidates who are located in different geographic regions, (sometimes different countries) and employing them on a remote basis. The flexibility to work from home, combined with demand for specific skills makes this a good option for some industries and job roles. However, hiring people in different countries tends to only work with larger organisations who have payroll teams set up in those countries.


Whilst there’s always a natural ebb and flow in the recruitment market we’re currently living through unique times and so there are a number of steps that businesses can take to help to alleviate some of the hiring pressures they’re currently facing.


Our recommendations include:

  • Looking at the structure and long-term strategy for the business
  • Invest in upskilling current employees
  • Analyse market trends when it comes to what employees really want and look at adopting these within your organisation
  • Be open to hiring people with transferrable skills
  • Work with a recruitment partner to get access to their talent pipeline.


If you’re looking for tailored advice and support with your recruitment strategy, we have over 20 years of experience in the HR market and pride ourselves on offering outstanding service with a personal touch.


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