If you want the right skills, train people
It has been a hard year for recruiters I learned, preparing my speech for The Recruitment Network Huddle event this week. Not just the agencies in the room, but those working inside employers. In fact, this group faces some long standing challenges that don’t look to be going away any time soon.
For recruitment agencies, the problems look to be relatively short term. By historical standards, vacancies are still above long term norms. But relative to the post-pandemic boom, they have taken a nosedive.
Data: ONS
Hard to find
For employers the problems are much more deep-seated. There are vacancies they just can’t fill. According to the CIPD, 37% have hard to fill vacancies. This is backed up by other numbers from across the industry. 48% struggle to find the right skills, says Michael Page. And that rises to 64% according to a study by TotalJobs.
The problem? The people they want just don’t exist. And the people they want are a pretty broad cross section of the working population. Just look at who can get Skilled Worker Visas for an idea.
Those who can’t teach
There’s a good reason we don’t have the people we need: we’ve stopped training people.
Since the early 2000s, the number of adults starting a publicly funded qualification has fallen by around 70%. The number of days of workplace training employees receive each year has fallen by 19% since 2011. And the average spend by employers per trainee has fallen 27% in the same time. (All data, IFS).
We don’t produce enough graduates with the skills we need. Our apprenticeship programmes haven’t received the support they required to become a mass alternative route. And the quality has been…variable .
There are other issues, like transport links that make it more challenging for people to take on work in other towns and cities from where they live. But fundamentally we have to deal with the issue of supply. And that means investing in people.
High Value People
There’s an especially good reason to do this now: every employee is worth more now.
Back in 2006, the average revenue per employee in the FTSE100 was £96,000. Adjust that for inflation to 2024 and it becomes around £160,000. And yet the real figure in 2024 was £446,000.
Some of this can be explained by odd little financial and property vehicles in the FTSE100 skewing the numbers. But even if you ignore those outliers, there are a lot of companies that now make millions of pounds for each employee.
With the application of AI tools to working processes in the next few years, you have to imagine these numbers will only increase. Greedy employers will look at this as a margin opportunity. But the smart ones with their eyes on the long term will recognise the obvious: when every employee is worth more, you should be investing more in each one.