Recruitment in a recession
In recessionary times, when unemployment is higher and therefore more people are looking for work, you would think that recruitment would become a much easier prospect for businesses. Some companies, particularly those employing high numbers of shift based or seasonal staff have indeed seen turnover fall and reduced pressure on recruitment. However, underlying skills shortages and a lack of fluidity in the market has meant that many businesses have still found it hard to find the right recruits.
Despite this being the longest and deepest recession since the second world war, unemployment hasn’t reached the levels we have seen previously - 11.9% in the 1980’s and 10.7% in the 1990’s compared to 7.8% currently. Compared to the 3.4% fall in employment in the USA, our 1.9% fall looks comparatively good. So what has been different? Employers have learnt that shedding staff, then having to re-hire and re-train when things pick up is expensive. During this recession, redundancy has been used as a last resort. Reductions in overtime, short time working, pay freezes and sabbaticals have all been employed as a way to reduce costs without reducing headcount. A record 27% of the working population is now in part time employment.
There has been very little fluidity in the market over the past 12 months, as those in employment have preferred to stay in their current role, and not risk a move. This has created problems for employers who have been recruiting – lots of unsuitable applications are being received, but some of the best candidates haven’t been tempted to move and finding the right person has remained a challenge. Although there are positive signs in the wider economy, the expected impact of public sector cuts is likely to mean an increase in unemployment in the short term, and as a result recruitment remaining a challenge for the time being.