by Gareth Gage, Associate Director, Robert Half
Demand for professionals in the South West of England and Wales is strongly outweighing supply. The region’s economy continues to improve and the labour market has moved firmly into post-recession territory. Talented candidates hold the upper hand in negotiations and the battle for talent is set to heat up.
Recruitment in Bristol and the South West
According to the latest Professional Hiring Index from Robert Half UK, four in ten (40%) HR directors in the South West and Wales have plans to increase the recruitment of permanent staff in the first six months of 2015. That figure is two points higher than it was the last survey six months ago.
The index reveals that just 3% of HR directors believe their company will reduce their overall headcount over the period – the same figure as last time. Less than one in 10 (8%) believe their company will freeze hiring in the next six months, by not filling vacant positions nor creating new ones. That figure is down from 15% six months ago.
Half of (50%) South West and Welsh HR directors are maintaining their staffing levels by only filling vacated positions, compared to 45% in mid-2014.
While these figures reflect a more moderate pace of hiring compared to London, where 58% plan to add permanent headcount, they still clearly demonstrate that Bristol, Cardiff and the surrounding areas are positioned firmly for business and labour market growth in 2015 – a trend we have been seeing since the start of the year.
South West skills shortage
The supply-demand shortfall shows no sign of abating in the next 12 months. Nine in 10 HR professionals in the South West and Wales say it is challenging to identify skilled professional-level employees for their companyu. A quarter state that it is very challenging.
A lack of niche technical experts is the top reason cited by HR directors for their struggles in recruiting staff (36%). This is followed by a lack of business and commercial skills (25%) and general demand outweighing supply for candidates (22%).
Employee retention has also been challenging for hiring managers in the South West as the professional labour market heats up. Three quarters (75%) of HR executives are concerned about losing top performers to other job opportunities in the next year. This will result in pressure on employers to increase compensation packages in order to retain them. It is likely to drive broader wage inflation through 2015 and beyond.
Bristol and South West Employment Trends
Figures from the Office for National Statistics support this increasingly positive picture. They show that, in February 2015, unemployment in the South West (4.5%) of England had fallen by 1.8% compared to the same figure in 2014. In Wales (6.7%), it also had fallen slightly by 0.3%. This is further compounding the challenges that employers face when looking for professional-level employees, including accounting, finance, technology and specialist office staff.