The employment sector has experienced more than its fair share of unprecedented challenges during the COVID pandemic. Furlough has perhaps been one of the most significant however, as the end date to the scheme draws ever closer, sector experts are predicting a further wave of disruption to the employment landscape.
According to Monster (the career platform) the average rate of churn across all sectors has typically sat at around 15%. However, sector experts are now predicting that a churn of approximately 40% seems likely come the end of furlough. So what is driving this predicted rate of churn? This is a very complex question…
Many players in the recruitment sector believe that employees have simply waited it out during furlough because they are unsure of what further impacts might affect employment opportunities. Although there are very strong indicators, this is of course this is a generalisation, as the likely impacts are not consistent across every sector. For example, many employees in hospitality and retail have been forced to move outside of their chosen sectors due to business closures and COVID restrictions. This in itself has led to a critical shortage of suitable candidates and vacancies in these sectors remain high.
The fact remains that in recent months, (due to both COVID and Brexit) candidates have been in short supply and many companies have struggled to recruit, partly due to the lower rate of employee churn. It is widely believed that the pendulum is about to swing a full 180 degrees and a significant rise in churn could have many outcomes, which could be partly determined by:
- the sector a business operates in and its location
- rates of pay/benefits
- whether the business has the ability to maintain a cohesive and dynamic recruitment strategy as we emerge from furlough.
All early indicators seem to be pointing in the same direction. As the employment landscape becomes clearer it seems entirely likely that a large percentage of employees will start to look at what other opportunities are available to them. This should, in theory open up the candidate pool again but conversely, may well add to the challenges that businesses face as they stand to lose a substantial proportion of their own skilled workforce.
So managing churn becomes of critical importance. We have already seen many of our own clients both locally and nationally, increasing pay rates to try to improve attraction rates and retention of new candidates. We anticipate that many businesses will also review their overall retention strategy and ‘ramp up’ the value-added proposition to attract and retain workers. This may include offering enhanced training opportunities and installing employee assistance programs, for example.
What we know for sure is that the next few months are going to be something of a challenge in terms of maintaining an effective human resources strategy. The outlook is hard to predict with any surety however, keeping up to date with the latest information will certainly help business to formulate a dynamic Recruitment Strategy.
Author: Rae Legallienne, Business Management Consultant, 1st Stop Recruitment 07/09/2021