At a recent employers’ conference, the wails of anguish from the floor centred on the inability of firms to find employees with the right skills. And once firms had found someone, they seemed universally unable to keep them.

So, what’s going on?

Fundamentally, things are changing for employers.

It’s nothing new, though these problems have been getting worse over recent years. Let’s deal first with the inability to find viable recruits.

Basically, the labour market skills available and the firms’ vacancies are diverging. This has its roots in what’s termed the hourglass economy. We discuss the hourglass economy and its trends in a previous blog.

As technology is introduced in everything we do at work, the vast fertile ground for technicians and jobs in the middle of the market has receded. Take some examples. Consider a television repair technician: no-one repairs TVs today. Take car repair shops: a computer tells the technician what’s wrong and a plug-and-play part is swapped. In both examples, the skills and knowledge of the operatives are no longer needed. Take a marketer too: there’s no skill now in building websites with sound SEO. Web search algorithms look for content so it’s for a domain expert to write copy, not someone with a marketing degree.

We could go on.

The technicians in the centre of the labour market who, in the 1970s, 80s and 90s, had all the ‘good’ jobs are now faced today with two options: re-train and strive to rise to the top end of the labour market to join the creators, or drop to the bottom end by taking whatever poorly paid routine jobs they can get. Creators are the high skill, high knowledge employees who move firms forward.

The firms who still need to employ technicians in ‘good’ jobs, are now struggling to recruit. Their old labour pool has gone.

The inability to hire new people to old-fashioned jobs stems from shifts in skills and knowledge in the labour pool and changes in industry norms of job types following technology advances.

So, what’s the solution?

Managers wanting to recruit must start by ensuring that the job they’re advertising is of quality. It must be a job that fits well in the firm, giving the jobholder responsibility and a sense of career. Old ideas about traditional jobs must go in the bin.

Managers must model their firm and build new jobs.

When jobs are identified internally as valuable, managers must then skirmish in the labour market to ensure that people with the skills and knowledge are out there and available. Then it’s an iterative process to balance what’s wanted with what’s available.

Having established the right job, it’s a question of running a high-quality search and selection activity to find the right candidates and select for the right skills and knowledge and personal characteristics. We’ve blogged extensively about this – every search and selection activity is unique.

All managers must strive to get the right person into the right job.

Having attracted and selected the right person, it’s then down to high-quality management.

The managers at the employers conference were universally Generation X. The people they were seeking to recruit were Generation Y. That’s always been an issue, compounded now with technology change, Brexit, and Covid.

It’s well established that Generation Y seek:

• Challenging, interesting work;
• A good work-life balance;
• Ability to use the knowledge they have:
• Personal development;
• To feel valued by their manager:
• Do work valuable to society.

Some of these points, like work-life balance, have become even more important during Covid.

We have blogged often about these points. We believe that a manager with eight reports will need to commit half their time in a week to those people. The remaining time is theirs. It’s that way round – managers only have a life once they have satisfied the needs of the people who work for them. Management is about the people being managed, not about the manager.

The firms at the employers’ conference expressed short-term frustration. All had launched traditional search activities with recruiters. All were failing to get people they needed today. None had taken a long-term view to determine the jobs they need tomorrow. None had engaged in job design. They were doing ‘same-old, same old’, and finding that this no longer works. Should they be surprised?

Things have changed.

The Government has made UK a hostile place for EU citizens. Many of their home countries have developed and good jobs are available there. Many have gone home. Whilst it might not affect the employers in the room directly, knock on effects mean shortages in all sectors.

The UK Chancellor, Rishi Sunak, loves to exhort that there are over a million job vacancies. The very fact that there are so many vacancies suggests a mismatch between supply and demand. As we illustrate, employers are not looking for the right people, and people are not skilled in the jobs that are available.

Finally, economists love to claim that the labour market is governed by pay. There’s truth there, but it’s not all about pay.

All jobs must be paid a good amount for the work done. That means that the pay must be competitive. Pay expectations today are rising in line with growth in work done. So, if an old-fashioned manager still wants to pay peanuts for an old-fashioned job, employees won’t hang around when they see that they’ve picked up a poor deal.

As Anas Zein Al-Abdeen, a restaurateur interviewed in the Guardian noted, “They finish their training and jump ship to another job that pays an extra 20p an hour”. It's a view amplified by Mark Jenkins at Brakes. He suggests that "for every two people we hire, only one person stays."

So, managers! Don’t let this happen.

However, it’s the whole deal that matters, not just the money.

So, what are that group of managers at the meeting to do.

First, managers can craft their firms in various ways. They must routinely engage in job design to match their need with the market supply. And they must change routinely.

Second, they must get the right person in the right job, and that’s all about running a quality search and selection activity.

Third, they must expend energy in the people they employ. The days of hiring someone to a poor job that they’ll stick because they’ll not get anything better are over.

And fourth, make sure the whole deal meets the need. If wages are not competitive because the margins are meagre, re-structure the business and the jobs.

Remember, playing in the labour market is a competition. Those managers who respond and excel will win. They’ll get the people, and they’ll grow and flourish.