by Chris Lawton, Associate Director, Robert Half UK
Hiring is back to pre-recessionary levels in London and the South East. C-suite executives across the region plan to grow their business and drive profitability in 2015.
In 2014, we saw demand outweigh supply for skilled candidates. This year we anticipate an even greater shortage due to the substantial uptick in hiring. Talented candidates hold the upper hand in the labour market and the war for talent is set to heat up.
According to the latest Professional Hiring Index from Robert Half UK, nearly six in 10 (58%) HR directors in London and the South East plan to recruit for new positions in the first six months of 2015. This figure is 12 points higher than it was in the previous survey six months before. The labour market for professional occupations like finance, accounting, technology and specialist professionals in London has seen strong gains for the last couple of years but is set to intensify over the coming year.
The survey shows that nearly four in 10 (38%) London and South East HR executives plan to maintain headcount over the period, down from 48% last time. Only 5% believe their company will freeze hiring in the next six months, by not filling vacant positions nor creating new ones. This compares to 4% in mid-2014.
London leads the UK in creating an new roles, with the number of businesses expanding headcount eight points ahead of the next highest region the Midlands at 50%. Hiring is expected to be robust across the UK with large percentages of companies in the North (48%), South West / Wales and Scotland (both 40%) also planning to recruit permanent staff.
Hiring challenges & skills shortage
This dramatically increasing battle for candidates is reflected in the fact that 95% of HR professionals in London and the South East say it is challenging to identify skilled, professional-level employees for their organisation. More than one in four (28%) state that it is very challenging.
A lack of niche technical experts is the number one reason London managers are struggling to find talent – a figure cited by nearly four in 10 (37%) directors – followed by a third (32%) who said that demand outweighed supply. With companies focusing on driving business growth and profitability, one in five (21%) hiring managers said that candidates lacked the requisite commercial and business skills for the role.
Employee retention continues to be a major concern for HR professionals as the labour market heats up. Four in five London and South East HR executives are concerned about losing top performers to other opportunities in the next year. This is leading many companies to review their compensation packages to ensure they are paying competitively to attract and retain top talent.
The 2015 Salary Guide has proven a useful tool in benchmarking salaries against competing organisations.
Companies that want to attract top talent will need to act quickly to win the ‘war for talent’. It is more important than ever that they should also “re-recruit” current staff in a bid to retain them."
Re-recruitment can include making them aware of training programmes, opportunities to progress, and other factors such as flexible working.
London employment trends
Figures from the Office for National Statistics support this increasingly positive picture. They show that, in February 2015, unemployment in London (6.4%) had fallen by 1.8% compared to the same figure in 2014. In the South East (4.6%), it had fallen by 0.5%. Employment grew by 1.7% in London and 1.0% in the South East.