Employers urged to focus on retention as job vacancies hit another record high

Experts are warning that pay growth could cause inflation increases as the number of job vacancies reaches a new record high. It is believed that employees are increasingly taking advantage of the jobseeker-friendly labour market to change roles.

In the three months from August to October, the number of job vacancies rose by 388,000 to a new record of 1.17 million, figures from the Office for National Statistics (ONS) have shown. At the same time, the number of people on payroll increased by 160,000, while the unemployment rate fell by 0.6 percentage points to 4.3% – nearly pre-pandemic levels. The total number of job-to-job moves increased to a record high, largely driven by resignations rather than dismissals.

Employers should be focusing on retaining their existing workforce as the figures show a surge in job-to-job moves driven by employees taking advantage of the tight ‘jobseeker-friendly’ labour market, and perhaps also people rethinking their career priorities after the pandemic.

In response, employers should focus on improving how they develop and retain their existing workforce to prevent or reduce skill and labour shortages, suggesting that businesses needed to look at salary and consider other business priorities such as the quality of line management; the availability of different types of flexible working; and the opportunities being provided to build skills and progress.

Separate research has found that nearly half of firms have increased wages in an attempt to find staff for hard-to-fill vacancies.  Raising wages has risen to become employers’ most popular response to hard-to-fill vacancies. The ONS figures showed that, in the three months from July to September, annual growth in average pay excluding bonuses was 4.9%

Employers should be engaging with their workforce to ensure they provide support to navigate the challenges ahead.

Don’t forget that 121 HR Solutions can assist employers to recruit top talent. But did you know we can also conduct benchmarking exercises to ensure that renumeration and benefits packages offered are competitive in the market.

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