The Pandemic paradox

When the pandemic started nearly 18 months ago, it started an unexpected paradigm shift in the labour market, an unexpected shift and one that has perhaps changed the business world forever.  

Whilst no one could have predicted the Pandemic, there were plenty of commentators and experts that predicted a sharp downturn and a strong possibility of business failures resulting in mass unemployment, however today the opposite is true.  

Whilst there was an initial downturn as individuals and businesses got to grips with being locked down and their day to day activities restricted. A combination of changes in buying behaviours, priorities and government interventions changed the landscape.  

Whilst many industries such as hospitality, events and traditional retailing bore the brunt of the restrictions, other companies business levels surged as people turned to online shopping, focused on allowable outdoor type leisure activity, or improved their living environments in response to the draconian measures enforced to stem the pandemic and this happened in conjunction with new post Brexit immigration restrictions coming in to being.  

Today we have a record number of jobs being advertised for the 1st time since 1974, over a million vacancies unfilled at this moment in time. Numerous businesses citing skills shortages as one of the biggest challenges they face and in our towns and cities many venues closed with signs saying due to no staff we are currently closed.  

So why did we not see a sustained economic turndown? Why is there not mass unemployment? Why are there so many jobs left unfilled? This is not any easy question to answer it is a paradox and goes against most economic commentators predictions but we can try to make some sense of why this has happened and some of the causes;  

  1. Furlough intervention along with other business funding support packages  from government ensured that there was still money in the economy, a kind of direct quantitative easing – cause and effect of keeping many businesses afloat where the normal order of things would have meant closure or restructure and undoubtedly redundancy. 
  2. Reduced costs of furloughed workers, minimal travel and no costly leisure trips – still providing an element of disposable income for a lot of individuals/ families. 
  3. Online channels to be able to purchase items direct to the door and plenty of time to browse 
  4. Increase in universal credit  
  5. New jobs created particularly in the behemoths like the NHS & Amazon 
  6. Brexit -The exodus of many EU nationals returning home due to a combination of new regulation and due to the pandemic.  
  7. Employees reassessing their life priorities, retirements, work life balance, self-employment.  
  8. Different stages of economic recovery in the global markets.  

One thing that is certain is the ongoing uncertainty and the fact that the world will have to live with the virus and instability that goes with it and this in turn means that with economic recovery there will be a sustained war for talent. Businesses need skills and with experience comes value, it is a simple case of supply and demand. This will undoubtedly continue to cause upward wage pressure, businesses will have to re-think their staffing and recruitment policies to nurture and retain the talent they have, but also look at new innovative ways to attract skills to their business.  

The infrastructure for employees to work remotely has been existence for many nears but the pandemic opened pandora’s box and forced many organisations to embrace remote working and I think it would be safe to say it is here to stay and will be an ongoing expectation, whether completely or in the form of a hybrid model. Of course remote working simply isn’t possible in a number of industries and professions and it is perhaps these sectors that will have the biggest challenges to overcome in terms of attracting and retaining skills.  

So as we enter a new age it is more important than ever for organisations large and small to work with a trusted recruitment partner, a recruitment partner that is able to offer more than a simple transactional relationship, a professional organisation that understands the labour market in- depth and that is able to operate consultatively, working collaboratively to overcome these challenges.  

There is not one overarching solution and each organisation is different but whilst these new issues present very real threats to business, the new ways of working also present some very real opportunities and in a lot of cases access to a wider talent pool that would not have been considered pre-pandemic.  

Sophic is a relationship led professional recruitment expert and part of the Incubo group of companies.