Fixing Talent Shortages in 2023 Means Fixing the Leaky Bucket

Staff attrition is turbo-charging the UK’s current talent shortage. As fast as businesses hire new talent, they lose existing talent – it’s like forever filling a leaky bucket. Meanwhile, high competition for new talent and extended time to effectiveness for new hires is eating into productivity, accelerating recruitment costs and making businesses less competitive. But it doesn’t have to be like this. Companies can solve the UK talent shortage by retaining, retraining and making better use of the workers they already have – a case of fixing that leaky bucket.

For many organisations, the cost and effort to hire new talent is becoming either prohibitively expensive or simply unsustainable. Worse still, in many cases, attrition is surpassing hiring, as the recruitment of new talent is failing to keep up with the departure of current personnel.

According to the Office For National Statistics current vacancies in the UK are running at 1.25million (with these likely to continue through 2023). Even looking back to the pre-Covid era, the UK had 823,000 open roles – driven perhaps by the fallout from Brexit as well as a general shortage of people due to other factors, (primarily an ageing population and not enough young people moving into technology roles). Now, even though vacancy numbers are starting to slowly fall, companies are still spending vast sums on recruiting new talent, and absorbing the additional costs associated with losing key staff members through attrition.

As well as cost, businesses must also tackle the time to effectiveness and the onboarding experience of new workers. Measuring these, and the costs in terms of management time, training, and lost business opportunities reveals an interlinked challenge: Recruitment of new talent should not stop at the offer stage. Strong onboarding is essential to engage new workers effectively. Likewise, retaining the experienced talent that organisations already have is vital to protect IP, team and business success.

It’s a situation that begs a fundamental question: Considering the competition, cost, and time it takes for businesses to hire new talent, compared to the benefits of retaining current staff, can UK companies afford to ignore the leaky bucket any longer?

As if the issues noted above were not bad enough, other factors are making life in the bucket even more turbulent. According to the World Economic Forum, up to 5 million jobs may be displaced by a shift in the division of labour between humans and machines, and 97 million new jobs are anticipated to emerge. These are encouraging statistics for workers, but for businesses, they present a new problem. Where will these millions of digitally-fluent workers come from?

In 2023, rising demand for digital talent is already increasing the costs of hiring at the same time as the lack of digitally-fluent workers is resulting in delayed projects and impacting companies as they fall behind their competitors. The Q4 2022 Manpower Employment Outlook Survey highlights that digital roles continue to drive job demand globally – IT businesses remain net positive at 42%, with Banking, Finance, Insurance and Real estate only 5% behind. All industries remain positive around growth in hiring despite ongoing cost inflation driven by the energy crisis sparked by the war in the Ukraine and a post pandemic hangover.

Meanwhile workers are signalling they want more training, with 39% of employees saying they’re concerned about not getting sufficient technology training from their employers to help keep their skills up to date.

Lastly, it’s not only the commercial world that is facing these challenges. As the UK civil service digital skills report, published 29^th November 2022, highlighted – the need for digital skills is a major challenge in modernising Whitehall infrastructure, with 61% of government departments citing a lack of funding and 50% an inability to hire the qualified talent they need.