How to Overcome the UK Skills Gap in 2022

Running a business is challenging, no matter how long you've been trading. One of the biggest hurdles for companies with ambitious growth plans is the current skills shortage. Across the UK, businesses have struggled to find the right people for the job, an issue fuelled by recent upheaval in the labour market.

The difficulties faced by employers have been traced back to several underlying issues, including the Covid-19 pandemic and Brexit legislation, which has made it harder for EU citizens looking to work in the UK.

If you're striving to grow as a business, hiring more employees will likely be on your radar. This means you should be aware of the potential challenges to your recruitment process in the coming months. To help you prepare, founder Deepak Shukla shares his insight into the UK skills gap and how SMEs can adapt their hiring strategy.

Why is there a skills shortage in the UK?

UK employers have been battling to source quality candidates for open positions, with many job posts left unfilled for extended periods. Recent statistics have revealed that job vacancies are higher than ever at 1.25 million as HR teams grapple with a shrinking talent pool.

The pandemic has had a clear impact on the UK's labour market. After months of furlough or unemployment during lockdown, many people didn't return to their previous roles when restrictions lifted. This has led to general labour shortages at a time when businesses are eager to recover and expand.

Furthermore, a combination of Brexit and the pandemic has seen a vast drop in migration from the EU since 2016, when the UK voted to leave the trading bloc. It remains unclear exactly how migration was affected by the pandemic, but it’s estimated that the migrant population declined by 1.3 million in 2020.

What’s the impact of the skills shortage?

Businesses have needed to offer higher wages to attract better applicants. For this reason, increased salaries have added to the rising costs confronting SMEs. Labour immobility has also hindered the potential growth of small businesses because recruitment has become more time-consuming and costly.

Some workers are also suffering from structural unemployment, with many who lost jobs during the pandemic struggling to return to work. This is partly due to dramatic changes in working styles. The switch to remote working has meant relying on tools such as video conferencing software, which may alienate some jobseekers. Furthermore, there has been a cross-sector push toward automation to mitigate the effects of future pandemics.

New working regimes and technologies require further training. However, workers who lack transferable skills may still struggle to adapt. Others might be reluctant to embrace change and instead explore other career paths.

How can SMEs tackle these problems?

Small businesses may feel at a disadvantage when vying for top talent. After all, offering a competitive salary, attractive benefits package, and standout company culture takes financial investment. However, it’s entirely possible for SMEs to overcome the current staffing crisis without breaking the bank. Here are four tips to consider for your HR strategy.

1. Focus on training

Many firms are receiving high volumes of applications, but few fitting the job description perfectly. In such cases, you could consider hiring someone with relevant soft skills and providing training to address any gaps in their knowledge. This approach can help your company grow faster than if it remained understaffed for a long period.

Training current workers could be even more cost-effective than this option. Based on current hiring fees, the price for training plus any salary increase might still be less expensive than recruiting. Furthermore, while the UK labour market is undergoing a skills shortage, looking for workers will be difficult.

2. Offer apprenticeships

Apprenticeships are growing in popularity for young people. Moreover, employing apprentices is a great opportunity for SMEs to gear training towards specific roles that support business growth. It's also much cheaper than hiring an experienced employee, as wages start from £4.81 per hour for apprentices under 18 years of age.

Training an apprentice takes time, so it's not a short-term solution. However, by investing in their development at an early stage, you could earn yourself a loyal employee for many years to come. Therefore, this tactic could protect your company from future skills shortages and long-term labour instability.

3. Optimize the hiring process

If you manage to find the ideal candidate for a job role, you must ensure that your hiring process is up to scratch. Otherwise, you risk losing them to a competing firm.

One of the most important areas to focus on is communication. There has been an increase in the number of potential candidates who have 'ghosted' an employer during the recruitment process. To prevent this, businesses must continually engage would-be hires by providing regular updates and maintaining open communication.

4. Improve employee retention

You won't need to worry too much about recruitment if current employees are happy to stay. Instead of putting time and money into replacing lost workers, you can focus on scaling your company's productivity.

Improving employee retention rates can be done in many ways, but most importantly, you should demonstrate how you value your staff by listening and adapting to their needs. Post-pandemic, many workers are cherishing family time and flexibility. Therefore, offering remote or hybrid working models could support a better work-life balance, increase employee wellbeing, and minimize turnover.

If you're focusing on growth and increasing profits this year, expanding your headcount will become a pressing concern. To put your company in the best position, make sure your wages, benefits package, and company culture align with current expectations. While improving your offering will involve some additional spending, investing in talent pays off in the long run.

About the author

Deepak Shukla is the founder of Pearl Lemon, an SEO Agency based in London. Alongside Pearl Lemon, Deepak runs a B2B lead generation agency serving clients worldwide. As a three-time TEDx speaker, ultramarathon runner, and Ironman competitor, Deepak also regularly advises corporations on mental well-being and success habits.

Overcoming the Skills Shortage in the UK

Businesses have found it harder to recruit for vacant job roles due to a widening skills gap in the UK. Founder Deepak Shukla shares his insight into hiring people in a difficult job market