The jobs market for highly prized and experienced professionals, including those within the accounting and finance, financial services and IT professions, has tightened dramatically over the last 12 months.
Our observations are endorsed by a report from the UK Commission for Employment and Skills, which says that while the number of job vacancies in England has returned to pre-recession levels, skills shortage vacancies – where businesses cannot find recruits with the skills required – are growing twice as fast.
Overall, skills shortage vacancies – which occur when employers cannot find people with the right skills and qualifications to do the job – now account for more than one in five of all vacancies (22%) up from one in six (16%) in 2009.
Despite relatively high levels of general unemployment, companies are finding fewer candidates with the specialist skills and experience needed to deliver business growth strategies and cope with the pressures of the regulatory environment. Many of the most in-demand professionals are again receiving multiple offers and counteroffers in what is fast becoming a ‘war for talent’.
In particular, top talent remains in demand as firms seek professionals with specific skills to help drive key initiatives and projects. While public perception suggests that these professionals are available in abundance, in reality there is a shortage of specialists with the specific knowledge and expertise firms need.
For example, nearly all (99%) executives surveyed in a recent Robert Half survey say it is challenging to find skilled financial services professionals today. More than nine in 10 (95%) are concerned about losing top performers, a 28 percentage point increase on last year.
The hiring environment within the IT sector is also experiencing a shortage of skilled professionals. The pool of available candidates continues to shrink, while the demand for technology experts with specific skills is climbing.
Competition is expected to be particularly fierce for professionals who can support mobile, big data, cloud and virtualisation initiatives. Talented candidates with high-demand skills may receive multiple job offers – and most will be very selective when choosing an opportunity.
Robert Half research shows that just over one in 10 (11%) employers report having skills gaps, and of these over one-third (34%) report gaps in the skills of their IT and telecoms professionals. Firms experiencing IT user skills gaps report a reduction in staff performance of around 22%.
Interim staff can provide an answer to the shortage. Since the downturn, an increasing number of companies within sectors such as financial services have hired senior interim staff to help with a range of projects and initiatives, the research found.
When asked why they had engaged interim staff to help manage those specific initiatives, over a third (37%) of respondents said that it was because they needed access to skills that were not available in-house.
A further 29% said it was because they faced a hiring freeze for permanent employees, while 27% cited the ‘cost-effectiveness of hiring interim versus permanent staff’. A much lower number of respondents (4%) pointed to the nature of the project, i.e. that there is no long-term need for the role, while just 3% said that they used interim staff for knowledge transfer and training for the rest of the team.
The war for talent is pushing up salaries for top-tier professionals, and companies are paying a premium to secure the best the market has on offer. This has created an imbalance among tenured staff whose remuneration has not kept pace, leading to retention fears.
Offering competitive compensation is therefore vital for both attracting top talent to your organisation and encouraging your best people to stay. Periodically benchmarking your salaries is key to making sure you remain on the mark.
Having up-to-date remuneration and hiring information will not only help firms set competitive salary levels for new staff but also help to retain valued employees. Changes to the way in which businesses remunerate – from traditional models through to deferred bonuses and bonus cap schemes – are also worth consideration.
Phil Sheridan, UK managing director of Robert Half