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Labour Market Update

Hewett Recruitment Directors Laura Hewett & Ben Mannion recently presented a Labour Market Update webinar, discussing market changes both locally throughout Worcestershire and nationally.

This webinar was conducted in association with the Herefordshire & Worcestershire Chamber of Commerce. 

Labour market - a national picture

It doesn't take an expert to notice it's been a rather unusual time in the UK labour market. There have been many signs of a slow down, which further decreased, quite drastically, when the lockdown hit. But when you begin to look past the headlines, there's evidence of some green shoots of recovery. The Report On Jobs, produced by the REC, looks at labour market activity in recent months and it shows that while temporary and permanent labour are still below pre-lockdown levels, it is significantly up from where we were in April. So looking right through to July, we are way ahead of where we were in April time.

When we break this down into sector areas, it's not surprising to see the biggest drop in labour demand was in Retail, Hospitality and Catering. 

The highest labour demand we're seeing on the permanent side is in Engineering, and on the temporary side, it's 'blue-collar worker's, which is evident in our own experiences at Hewett Recruitment.

From a supply perspective, the report states there has been the biggest increase in applicants on the market since 2008. 31% of businesses said they expected their workforce to further decrease in the next three months.

So the overall picture from a national perspective suggests an improving trend in terms of demand. There's still some way to go of course, with some hesitation regarding the potential of a second spike, the end of the furlough scheme and although we hate to mention it, Brexit.

The local labour market- the Midlands compared with the rest of the country

Throughout July, similarly to on national level, locally throughout the Midlands there has been an improvement in the picture for permanent recruitment, but the labour market, of course, does remain volatile following 5 months of consecutive falls.

Looking at the comparisons of the 4 regions the REC tracks for its local data: Midlands, North, South and London. We can see that in July the Midlands fared best in terms of recovery in the number of permanent appointments and also was the only region to show real growth in the number of temporary placements

How has lockdown affected the labour market in the Midlands?

Understandably, businesses seem to be favouring flexibility as restrictions are gradually eased, so we have seen strong uptake of the flexible furlough scheme and particularly in the midlands, the use of temporary workers. The hope is that this boost in temporary roles will help the midlands find it’s feet faster.

Thinking about the reason for the Midlands out-performing other regions: 

The Midlands is, of course, the home UK of manufacturing. Whilst Automotive and Aerospace have been badly hit, other manufacturing markets have out-performed expectations, such as medical and food production-related industries.

To give another perspective on the local labour market, we obviously have a relationship with the local Jobcentre and DWP. We visited recently to see how they are finding the market locally vs the national headlines. From their perspective they are seeing a similar number of roles being advertised through them as before lockdown, that’s the typical types of low-level roles they would advertise. And whilst they are seeing more people being made redundant, it is more the middle management type roles, not roles the Job Centre typically deals with. And certainly not the huge numbers that other areas of the country are facing.

That reflects and match what we are seeing here at Hewett Recruitment. At the moment, the growth we are seeing is really polarised into unskilled industrial temps and highly skilled IT software professionals. And so far recovery is following the pattern it did in the last recession. We saw industrial temps and IT pick up first, followed later by commercial office temps as businesses become busier and want to increase their capacity without having the certainty to commit to a permanent employee. We would expect to start seeing that come through in the next weeks and months.

Review of the QES published by the Herefordshire & Worcestershire Chamber of Commerce. 

This is an incredibly useful report published quarterly that really takes the temperature of the two counties at a moment in time. This one particularly focuses on the impact of COVID on employment.

What’s really interesting about this particular report is the context – the data was collected between 18th May and 8th June, which although only 3 months back, feels like a lifetime ago when we reflect back to what life was like at that moment (shows the pace that things have been changing):

  • Boris had just announced that people could return to work if they couldn’t work from home
  • Non-essential retailers could open from 15th June if COVID-secure

At that time there was still an incredible amount of uncertainty and looking at general trend in responses to the QES, I think that comes through. It will be really interesting to see how much things have moved on when the next QES is published and businesses have perhaps had more of an opportunity to take a step back and actually do some planning rather than living hand to mouth as so many of us were.

So throughout the pandemic so far, we have been keeping in regular touch with the clients we deal within the local area and We have talked a lot about the different phases we are seeing businesses in, including ourselves through this. So thinking about the phases of business recovery or response to a crisis. There are different models you can use to categorise where businesses are at – one is along the lines of survive, reset, restart, thrive. There was another from McKinsey which was resilience, return, reimagination, re-form.

But, whatever the headings are they all leave us realising that probably back in May June, many businesses were still in the “survive” stage and others were in the “return” or “reset” phase. And the relevance of that really is the fact that companies were thinking in the absolute shortest-term – cashflow, making work-spaces COVID-secure and just waiting for those daily government briefings to let us know what we can and can’t do.

So when you put the questions in the QES into that context, it’s not surprising that many businesses responded negatively to questions about succession planning and changing working practices. Which when we read those responses now, might seem alarming or that a lot of companies are just digging their head in the sand.

Anecdotally we are seeing the market pick up as ben mentioned and I think we are noticing that companies now have a little more headspace for the more long-term thinking and creative parts of running a business. So reflecting on some of the questions that were posed in the QES, what are businesses talking about now?

The 2 biggest themes we are hearing about from our clients are:

  1. Flexible/remote working
  2. Mental/physical health
  3. The ageing workforce is starting to come back as a subject of consideration, but again thinking of those phases of business recovery, I think as the ageing population is one for the next few years – companies aren’t ready to think that far ahead just yet… maybe we should do our next webinar on that subject! Flexible and remote working, as well as increased mental and physical health, are ‘here and now’ subjects that need to be addressed.

Flexible working!

Something we at Hewett’s have been doing seminars on, encouraging companies to adopt for the last couple of years. It has suddenly landed to the extreme! Flexible working does suggest an element of choice in the matter – whereas we had it rather thrust upon us, but given pretty much every viable business now has developed the capability to offer flexible working, most are planning that once the pandemic subsides, flexible working will be here to stay. Whether that’s People working from home completely; or a mix of home and office; altered hours of work to accommodate childcare. So we are seeing companies now formalising these practices that were largely cobbled together at speed back in March/April – we are seeing remote working and flexible working policies being talked about; home risk assessments and moving away from the laptop and mobile we ran out of the office with in March to more permanent and comfortable desktop set-ups at home. From a recruitment perspective, there are clearly many benefits to this in terms of attracting a much broader pool of candidates, but the remote recruitment process, onboarding and working all come with their challenges and considerations. 

Mental and Physical health. 

Again an important and popular topic in the last few years and something that many businesses have really invested into supporting. Suddenly we are faced with employees who are struggling. So many more people feeling anxiety and others maybe feel isolated when working from home. Certainly, we at Hewett have attempted to implement home-working but in general, most of our employees would really prefer to be in the office – as people-people particularly I suppose, the idea of working from home for any more than a day a week for most is daunting.

Thankfully we haven’t had to push the issue as we have been able to accommodate people who want to work in the office, in the office. But for other businesses where homeworking is part of the ‘new normal’, it can be a challenge in terms of mental health and employee engagement. Now as business is busy again and people are largely in the office, that’s where isolation is more likely to hit, so continuous engagement and communication is key.

For more information regarding this, visit Worcestershire Works Well for business resources and support.  

For further information and support, please get in touch.