In the immediate aftermath of pandemic restrictions the UK labour market was in a state of flux – vacancy rates reached record heights and workers were willing to job-hop in search of higher salaries. This became widely known as the great resignation.
Now, faced with a sluggish labour market, declining employment rates and lower levels of employee turnover, we are entering a new era: the ‘big stay’.
The term, coined by the chartered institute of professional development (CIPD), is apt for the current situation where job stability has taken priority for employees and as employers focus on retention.
More than half (55%) of employers are looking to maintain their current staffing levels, according to the CIPD’s latest Labour Market Outlook, released last week. This is the highest level it’s seen since 2016-17.
There’s a real need to be thinking about how you can use the skills of your workforce more effectively
“Based on these trends, there’s likely to be further falls in both turnover and vacancy levels in 2024,” James Cockett, labour market economist for the CIPD, says. “Employers will need to look forward and factor in this lower attrition when making decisions around staffing levels and the future of their workforce.”
With fewer organisations looking to recruit, employers will now have to shift their focus towards training and development in order to fill skills gaps within the business and future-proof their workforce.
“There’s a real need to be thinking about how you can use the skills of your workforce more effectively,” says Lizzie Crowley senior skills policy advisor at the CIPD. “But also to take a much more strategic approach to considering whether you build, buy or borrow talent when addressing workforce development needs.”
While many companies would have previously opted to bring in talent to address skills shortages, this hiring slowdown – combined with the slowdown in the wider UK economy – means that employers will need to be much more reliant on the talent they already have within the organisation.
Crowley adds: “Companies need to build an understanding of the skills across their workforce and invest properly in their people to ensure that they’re able to develop the skills they need to grow.”
Skills development can’t be overlooked
Learning and development is an area of talent management that UK businesses have consistently overlooked. Average investment in training by UK employers has decreased by 27% since 2011, according to the Institute for Fiscal Studies and is half the average spend of companies in the EU.
It means that UK businesses have a lot of catching up to do if they are to fill their vacancies through upskilling alone, as 52% now plan to, according to the CIPD. “We’ve seen a long-term decline in investment and training in the UK, so there’s a real need for employers to step up in this area and invest more in their people,” Crowley says.
Employers’ first priority should be to conduct a strategic workforce planning exercise, in order to assess the current and future skills requirements of their organisations, according to Crowley. It’s also worth noting that many employees have skills they’re not directly using in their current role. “This represents another opportunity,” she adds.
In the long term, it’s a much more sustainable and rewarding approach, both for the company and colleagues
It’s then down to employers to provide learning opportunities for their staff, be that through training programmes, skills courses, coaching or apprenticeships.
David Reay, group people director at publishing house Immediate, has introduced various training programmes focused on upskilling people in the emerging areas of AI, data and insights. He claims these are designed to “take the fear out of the future and encourage experimentation and hands-on learning”.
Managers also need to be prepared to help employees deploy any new skills they learn. “No amount of training is going to make an impact on your organisation unless line managers are able to ensure that individuals have an opportunity to apply those skills in their jobs,” Crowley adds.
While training and development often requires more time and patience from employers, it may be a more economical and effective way for companies to navigate a slower talent market.
