From Redundancy to Talent Scarcity: The future of work is changing

The UK has seen a 103% increase in planned redundancies in the second quarter of this year. And we are not alone. Back in July 28,000 workers in the US tech sector were made redundant in mass job cuts, including Microsoft and Gopuff announcing their own redundancy plans.    Redundancy is something that is never taken lightly. For many companies anticipating or going through a period of economic struggle, redundancy is only considered as a final resort. After all, people are the most valuable asset in any business.

There is a lot of media coverage at the moment on businesses making redundancies. Driven both by needing to get through this current period of economic crisis, as well as the ongoing shifts in consumer behaviour.

At TheHIVE collaborating businesses are matched to share talent and staff. And we are asking: are the redundancies we’ve seen over the last few months really the only option that businesses have? Especially when the labour market remains tight and talent is so scarce? Whilst the economy might be unstable right now, what will happen when conditions do stabilise? Will businesses become faced with staff shortages?

A sector perspective

Let’s take a look at an industry that was hit hardest by the impact of COVID-19 here in the UK to set some further context, the hospitality sector.

A recent House of Commons report found that in 2019 the economic output of the hospitality sector was £59.3bn. This accounted for roughly 3% of the UK’s total GDP. In the three months to March 2020, there were 2.53m jobs in the hospitality sector in the UK, representing 7.1% of total UK employment.

When the UK economy began to re-open in 2021, the hospitality sector faced immediate staff shortages. Again, the ONS tells us that for the three months to February 2022, there were 166,000 job vacancies in the hospitality sector which accounted for 7.8% of all employee jobs.

There are a number of reasons leading to the major staffing crisis in hospitality right now, including:

• Businesses are now hiring again on mass following making staff redundancies
• Staff are not returning to jobs that were previously furloughed
• Staff are settled into other, less-uncertain sectors
• Many staff have moved away from the UK during the pandemic.

And on top of this, the industry is now under pressure to increase salaries and improve working conditions in an effort to bring people back to the sector.

The example of the hospitality sector is one that many businesses can relate to because as customers we are getting a glimpse of the impact first-hand. Under-staffed restaurants, tables left uncleared, service and food quality often not meeting our expectations and a sea of vacancy adverts in high street restaurant windows, being just some examples. The industry simply cannot recruit enough qualified and talented staff.

So what can businesses do?

Talent scarcity and talent retention are at the very top of the list of problems employers are currently facing with 80% of UK companies currently reporting shortages. In short, the challenges facing several industries at the moment to find and retain staff should be kept in mind when considering the last resort of redundancies. Even those businesses able to bring staff back are now paying a premium for talent staff in the market. Not to mention the time and financial costs associated with re-recruiting as well at the investment in onboarding and training.

Ahead of making ‘precautionary’ cuts, businesses could consider other avenues for retaining and motivating their staff, especially in light of the current shortage of talent. One of those avenues could be Staff Sharing.

Staff Sharing is essentially the sharing of your staff with another business. For example, at TheHIVE we match trained and highly skilled staff from over-resourced businesses with under-resourced businesses looking to hire additional staff to collaborate on B2B projects. This supports businesses in avoiding unwanted redundancies, whilst retaining valued and talented staff by providing secondment or staff-sharing opportunities, at a time when talent is almost impossible to find.

Find out more about Staff Sharing at TheHIVE.