Implications for Human Resource Management

The Current Labor Market Situation in the UK and Its Implication for Human Resource

Management

The outbreak and subsequent quick spread of the Covid-19 in the UK and other parts of the world, along with other factors, has brought about an evolving impact on the labour market in the UK. Following the negative impacts of the pandemic on the economy that arose due to the restrictions and measures aimed at managing the spread of the virus, the labour market suffered a deterioration with many indicators falling drastically (Labour Market Statistics, 2021). However, data by the Office for National Statistics (ONS) (2021) indicate that the labour market is steadily recovering with some of the labour market indicators that had deteriorated returning to the levels they were before the pandemic. This blog will analyze the current situation of the labour market in the UK and assess its implication for HRM dissertation help.

The recent months have seen the employment levels rise, and unemployment levels fall, for both men and women, although it is estimated that the close of the Coronavirus Job Retention Scheme (CJRS) later this year will result in the rise of unemployment. Whereas the current employment rate is approximated at 75.2%, 1.3% lower than before the pandemic and 0.5% higher than the period between February and April, 2021, the unemployment rate is currently estimated at 4.6%- 0.6% more than before the pandemic and 0.3% lower than the previous quarter (Employment in the UK – Office for National Statistics, 2021). With more than 11.6 million jobs having been furloughed since the commencement of CJRS, this number has been gradually declining since February when the number of furloughed jobs stood at 4.9 million. As of August 2021, the number of jobs on furlough through the CJRS stood at 1.6 million (Labour market overview, UK – Office for National Statistics, 2021).

Despite affecting the overall economy, the effect of the pandemic has been more profound on particular age groups status of the labour market- while young workers (16 to 24 years) and those aged 65 years and above have been more likely to have left employment and become economically inactive, a higher rise in employment rate has been recorder among workers aged 25-64 years (Labour market overview, UK – Office for National Statistics, 2021). The pandemic has also disproportionally affected some workers, including women, low paid workers, disabled workers and those from ethnic minority groups (Foley, Fancis-Devine and Powell, 2020; Powell and Francis-Devine, 2021). The latest increase in employment can also be attributed to an increase in the number of part-time workers, which had significantly decreased during the pandemic. In the period between May and July 2021, the total actual weekly hours worked was 1.01 billion due to the relaxation of the Covid-19 restrictions- although this was an increase of 43.2 million hours compared to the previous quarter, it is still lower than the pre-pandemic levels by 45.4 million hours (Employment in the UK – Office for National Statistics, 2021). Between June and August 2021, the UK labour market saw the number of job vacancies stand at 1.034 million- this represents 269,300 more vacancies (35.2% growth in vacancies) in comparison to the January-March 2020 pre-pandemic level. All sectors experienced an increase in the number of their vacancies, with a majority of the industry sectors attaining record levels. The greatest vacancy increase (75.4%) was witnessed in the accommodation and food service sector (Labour market overview, UK – Office for National Statistics, 2021). As a result, the labour market currently witnesses an increase in recruitment intentions, with 69% of employers aiming to recruit workers by September 2021, while redundancies have remained low as only 13% of employers expect to make job cuts (Labour Market Outlook ǀ Surveys ǀ CIPD, 2021). With the pandemic having disproportionally hit the various sectors, employers in the hospitality, arts and entertainment sectors (at 51%), relative to 39% of all employers have reported hard-to-fill vacancies (Labour Market Outlook ǀ Surveys ǀ CIPD, 2021). As a result, the main focus of employers with employment intentions is the filling of vacancies, especially those that they have identified as hard-to-fill. The corresponding increase in PAYE employment and vacancies, and decrease in employment levels have been identified as being brought about by new job starts especially in sectors that had shut down and are now gradually reopening and resuming operations (Labour Market Statistics, June 2021 ǀ Institute of Employment Studies (IES), 2021). These industry sectors include, but are not limited to the hospitality, arts and entertainment sectors.

The above overview of the current situation of the UK labour market brings with it various implications for human resource management (HRM), particularly in relation to the various HRM functions. The HRM functions that this article will focus on are recruitment and selection. For instance, following the significant increase in the number of vacancies in all the sectors, and the subsequent need for employers to fill them, it is essential that organizations pay increased attention to the recruitment and selection functions of their HRM. Given that organizations seek to attract the best candidates, who are best suited to and will contribute to the achievement of their overall goals and objectives, they should take into account various factors that will increase the quality of work related to the vacancies they seek to fill (Stanujkic, Djordjevic and Karabasevic, 2015). One way through which organizations can attract the best workers is through the HR branding strategy. According to Wojtaszczyk (2012), HR brand is:

‘the package of functional, economic and psychological benefits of employment, and which are identified with the employing organization.’

The management of HR brand involves managing aspects such as the company’s image and reputation to establish an attractive brand that will, in turn, attract the best candidates through the HRM recruitment and selection functions (Kim and Sturman, 2012; Yüksel, 2015). Among the factors which organizations could incorporate to ensure that their HRM recruitment and selection functions attract the best candidates include; clear career ladder and pathways, professional and personal development (training) opportunities, effective/proper working environment, work-life balance, flexibility, security, and adequate remuneration (Ahmad Azmy, 2018). Additionally, according to Figurska and Matuska (2013), it is vital for organizations to take into account brand elements, such as their industry’s/sector’s attractiveness, economic conditions, organizational culture, employee benefits and corporate social responsibility, in order for their HRM recruitment and selection functions to enable them attain the most talented candidates.

Conclusion

The labour market in the UK has started to gradually recover following the easing of the Covid-19 containment measures, including lockdowns, which had led to it being adversely affected. The key observation of the current labour market is the increase in employment and economic activity, and a decrease in unemployment levels. All these indicators of the job market pose various implications for HRM. For example, the increase in employment has resulted in an increase in the number of vacancies in all the sectors, which organizations need to fill. The achievement of this task will require that firms undertake various effective HRM functions, key among them recruitment and selection. The consequence of this is that the organizations will be able to acquire the best and most talented candidates to fill these vacancies, which will, ultimately, culminate in them achieving their overall goals and objectives.

Take a deeper dive into Human Resource Management Practices at HSBC Bank with our additional resources.

References

Ahmad Azmy, S.E., 2018. Recruitment Strategy to Hire The Best People for Organization. Journal of Management and Leadership, 1(2).

CIPD. 2021. Labour Market Outlook | Surveys | CIPD. [online] Available at: [Accessed 3 October 2021].

Economy. 2021. Labour Market Statistics. [online] Available at: [Accessed 18 October 2021].

Figurska, I. and Matuska, E., 2013. Employer branding as a human resources management strategy. Human Resources Management & Ergonomics, 7(2).

Foley, N., Francis-Devine, B. and Powell, A., 2020. Coronavirus: Impact on the labour market. House of Commons Library.

Kim, D. and Sturman, M.C., 2012. HR branding: How human resources can learn from product and service branding to improve attraction, selection, and retention.

Labour Market Statistics, June 2021 | Institute for Employment Studies (IES). 2021. Labour Market Statistics, June 2021 | Institute for Employment Studies (IES). [online] Available at: [Accessed 3 October 2021].

Ons.gov.uk. 2021. Employment in the UK - Office for National Statistics. [online] Available at: [Accessed 3 October 2021].

Ons.gov.uk. 2021. Labour market overview, UK - Office for National Statistics. [online] Available at: [Accessed 3 October 2021].

Powell, A. and Francis-Devine, B., 2021. Coronavirus: Impact on the labour market. [online] House of Commons Library. Available at: [Accessed 3 October 2021].

Stanujkic, D., Djordjevic, B. and Karabasevic, D., 2015. Selection of candidates in the process of recruitment and selection of personnel based on the SWARA and ARAS methods. Quaestus, (7), p.53.

Wojtaszczyk, K., 2012. Employer branding czyli zarządzanie marką pracodawcy: uwarunkowania, procesy, pomiar. Wydawnictwo Uniwersytetu Łódzkiego.

Yüksel, M., 2015. Employer branding and reputation from a strategic human resource management perspective. Communications of the IBIMA, 2015, p.1.