The latest UK labour market report
on jobs (sponsored by KPMG and REC) highlights the continuing trend of increasing candidate demand and falling availability has resulted in the slowest rise in permanent placements for over two years. Bernard Brown, Partner at KPMG defined the key challenge facing UK recruiters in his statement; “the growing skills shortage is cross sector and cross discipline: recruiters are struggling to fill vacancies for everything from software engineers to sales.” He also goes on to discuss the lack of candidate supply driving up salaries and businesses falling short of their long term growth potential because they cannot meet their staffing demands. 12 months ago I wrote about the need for an alternative response to this worrying trend other than just ‘throwing money’ at the problem. This is required now more than ever before.
To further highlight this you only need to look at the trends in engineering which is one of our key markets. It remained the number one sector for permanent candidate demand and shows no sign of slowing down. Meeting this demand however is an increasing challenge as the availability of permanent candidates fell for the twenty-sixth time in as many months. This resulted in permanent salaries continuing to rise as companies pay premiums to plug the skills shortages. At Perpetual we are seeing the effects of this at first hand as we have a unique insight into this problem through our engineering parent company, the Cygnet Group. Cygnet have an ambitious growth plan to expand from £40m turnover to £100m by 2020 and will only achieve this if they recruit the very best engineers on the market along with retaining the existing valuable assets they already have.
As a growing SME business Cygnet is a prime example of the expanding businesses we service and the need to continually evolve how effectively we access quality candidates, as well as assisting them in developing retention mechanisms remain key focuses for Perpetual. Part of this strategy has come from the recognition that we cannot rely on filling clients vacancy requirements through adverts and job boards alone. The utilisation of our 100 plus strong internal engineering workforce at Cygnet has become a vital resource for recommendations of other high quality engineers. Over the last 12 months client demand for skilled engineers from mechanical and controls engineers to project managers has heightened the need to maximise these referrals from our internal engineering links more than ever. Our partners have benefited from this as they have seen the quality of recommendations as a more trustworthy source than those from job boards and adverts.
One of the other key initiatives we have adopted to deal with the rising candidate shortage has been to plan ahead and work on a similar strategy that we have adopted within the Cygnet Group. We have worked closely with the engineering managers to identify the key areas where skills shortages provide the biggest risk to achieving growth potential. Where we have recruited experienced engineers we have also looked to underpin them with talented graduates and longer term apprentice prospects. Meanwhile Cygnet have honed their succession planning, appraisal process and structured skills matrix’s. Together this has strengthened areas of previous weakness as well as allowing a real clarity for individual progression and skills development. I believe this is a better long term blue print than offering higher salaries and running the risk of them being lured away by the same means. This is the same philosophy we are advocating with a number of other SME growing businesses as they have to adapt and change to bring in top talent and truly offer a better alternative than larger businesses with greater budgets. If the candidate shortage continues it will be the companies which adapt quickest which will prosper.