UK Labour Shortage.

It’s a Post-Lockdown Boom - not a symptom of  Brexodus.

The labour shortage facing the UK is not the result of a Brexodus of foreign workers but of a post-lockdown boom, an examination of the current jobs market has concluded. 

Recruiter Randstad looked at changes in the ratios of vacancies to applications for jobs in the UK’s private sector - using the volume of applications as a proxy for candidate volumes.  

In the first half of 2020, Randstad said they had 14 applications for every private-sector job advertised.  In H1 2021, this ratio fell to 8 applications per job.

The change in the ratio of candidate demand to supply of office jobs alone was marginally better with the ratio falling from 15 applications per vacancy to 9.    

But the change has not been driven by a collapse in candidate numbers.  

Randstad says that, while the number of applications for private sector roles fell by 15 per cent, the number of vacancies rose by a greater degree - increasing by 60  per cent.  

The biggest change in the supply and demand was in engineering roles.  In the first half of 2020, there were 17 applications per vacancy.  A year later, there were only 4 applications for every role.    

At the other end of the spectrum, the supply of business support staff - administrators, executive PAs, business managers, receptionists, data entry,  PRs, marketing professionals, and HRs - has held up much better, with the ratio of applications to vacancies only falling from 16 to 12 over the course of the last 12 months.

A string of firms have experienced staff shortage issues in major markets, including the UK. These shortages are not, on the whole, being driven by a dearth of EU labour in the face of Brexit. The UK’s settlement scheme for residents of the EU had, by the end of May, received more than 5.6 million applications. At that point the programme still had a month to go, so it was more like 6 million in the end; the ‘Brexodus’ hasn’t played out as we feared. Neither is this being driven by the number of over 60s dropping out of work since Covid struck. Essentially, this is not primarily about a constriction in the supply of labour. Workers are back in power because of the success of the vaccine rollout and the removal of lockdown restrictions - and the resulting economic bounceback.

Adrian Smith
Senior Director of Operations at Randstad UK.

UK businesses being set up at record rate.  The creation of new firms at Companies House hit a record high this year, up by 24 per cent.  Lloyds Bank Business Barometer report says business confidence was up to 36 last month, its highest point since April 2017. 


Randstad says that agile employers need to adapt to secure their first choice of candidate. 

The end of furlough at the end of the month should unlock a chunk of the labour supply but it won’t solve the labour shortage overnight.

The first thing to do is reevaluate your asking salaries. Are they realistic given the amount of hiring going on? Perhaps not. Remember, that the explosion in remote working means that employers outside of the capital now need to compete with London salaries as people from all over the UK can now get a job for a London based organisation and be offered a London based salary. By way of example, we’ve seen salaries for really good cyber professionals in the East Midlands rise by over eight per cent in the last year. At the start of the summer, we were seeing the average pay packet for construction workers up by 14 per cent compared to the same time last year. Goldman Sachs is now offering graduates starting packages of £100,000 a year in the UK. We have seen the average salary of a marketing assistant in the North West rise by as much as 18 per cent in the last 12 months.

Second, if you’re hiring office workers, use remote working to widen your candidate pool. Employers who demand people work on site work are now missing out on candidates to a degree that didn't happen before the pandemic. This should go hand in hand with re-examining your wider benefits package in line with your competitors. Top of the list for workers at the moment is more flexibility.

Third, if you find the right person, move fast - much faster than you would have done two years ago. There are so many organisations looking to hire right now that, if you move slowly, you will miss out on the top talent.

Lastly, consider making more use of contractors and temporary staff, rather than focusing solely on permanent hires. While the costs aren't all that different, casting the net wider can help you secure a candidate who really fits the bill.

Adrian Smith.
Senior Director of Operations at Randstad UK.