It’s come round again, the busiest time of year for most businesses, silly season – the frantic festive period leading up to Christmas. Around this time, companies need extra support to meet the increased demand for products and services. Warehouses and distribution hubs need extra hands to help with picking and packing, logistic operators, extra drivers, retailers, extra staff for late night openings – the list goes on. The increase in staffing levels is a common theme around this time of year. However, with the landscape for recruitment changing, finding workers to fill these positions is now becoming increasingly difficult. Encore Personnel Director, Pete Taylor, discusses the issue and what agencies can do to tackle it.
Let me begin with this – last year, in the 10-week period in the run up to Christmas, if we’d had an extra 800 workers on our books, we could have employed them all. Fast-track to this year, and we have the same if not more need from clients (all be it even six weeks earlier than last year’s peak). Evidence of a reducing workforce is becoming ever more apparent.
There are three key issues to discuss here – availability, demand and pay rates.
With the referendum result still up in the air, there is a lack of clarity on immigration laws and concerns about the free flow of labour in and out of the UK. Add this to the recovering European economies including the Balkan countries, Hungary and Poland, and we are starting to see a significant reduction in available labour in the UK. This opens up the first issue of availability – for the last four years, we’ve seen an increase in European countries retaining workers, meaning job seekers no longer need to look further afield to find work. Instead, they can stay within their home country, closer to their families – a lower risk strategy altogether. EU nationals are opting for work closer to home in Denmark, Germany and Holland where average pay rates for unskilled and semi-skilled workers are €9.56ph.
Along with enhanced pay rates they are also attracted to paid travel and accommodation. Gone are the days when moving over to the UK would bring greater opportunity – another reason why prospects are choosing to stay put.
Secondly, demand for staff in the UK – there is an increased requirement for labour, especially for shift work, yet a rapidly diminishing workforce.
In the run up to key seasonal occasions such as Black Friday, Cyber Monday and Christmas, recruitment agencies will be receiving requests across several different sectors. Following an increase in online shopping – last year, a whopping £1.4bn was spent on online sales in the UK on Black Friday, an increase of 11.7% from the year before – companies such as Amazon and DHL are busier than ever before, creating a need for extra warehouse staff and drivers. Last year, we helped 1,172 companies fill 19,910 positions, to meet the increasing demand for work around the festive period.
Finally, our third point is around pay rates – around 15 years ago, people were pleading for work, but now the boots on the other foot. Workers have cottoned on to the fact that they are in demand and therefore have higher expectations. They want shift-based work, with higher pay rates, plus all the added benefits. With job perks now including everything from staff discounts to table tennis and pool tables, there is a new culture of working, making it a competitive market for businesses looking to employ temporary workers over busy seasonal periods.
With budgets being squeezed, as fear over the referendum results sets in, companies are becoming more efficient. Those which used to mass order in the run up to Christmas and generally throughout the year, are now only working to order. With less stockpiling, it means a reduction in the amount of warehouse space and staff required. Technological improvements have played a huge role in making ordering more efficient whilst reducing warehouse costs.
What’s the answer? Planning ahead and a strong marketing campaign is a good place to start. Recruitment agencies need to work closely with their clients, educating them on the current situation and encouraging them to look ahead. For clients, by reviewing required staffing levels and informing agencies ahead of time, it will certainly help to meet the demand. Without enough notice there will be a lack of suitable staff to fill the gaps.
To attract labour, recruitment companies will need to work harder. An external marketing strategy which promotes opportunities to businesses and potential employees needs to be put in place – an additional cost but one that will bring much needed benefits in the long run. By using a targeted approach to reach new and existing workers it should help agencies to make up the numbers over Christmas.
Ultimately though, with clients wanting to pay less, and staffing supplies at an all-time low, it’s a tricky combination to handle for most recruitment agencies. The post Brexit result will bring extra clarity around the issue of low staffing levels in the UK, and give us a base to drive forward from, so we can attempt to combat this issue earlier next year, re-building a bank of suitable staff to use throughout busy periods in 2019.