Four ways to turn tight labour markets to your advantage

So-called “tight labour markets” remain a real concern for many employers – and it’s taxing policy-makers’ minds too. The number of people classed as “economically inactive” in the UK has increased by half a million since the pandemic, leading to calls for the government to persuade older workers and help the long-term sick to return to work.

In the meantime, more than half of employers say they’ll need to raise salaries by 5% this year to fill their vacancies. One poll of more than 2,000 employers found that 57% say they have hard-to-fill vacancies; many expect this problem to persist for at least six months; and 43% have tried to solve the problem by raising wages.

This is a tough time if organisations continue to fish in the usual talent pools. Applicants also now have more power to choose where, when and how they work. They are seeking more opportunity for career progression and demanding guarantees of wellbeing at work.

But, to paraphrase the second US president John Adams, it’s a problem that could be an opportunity in disguise. “Employers won’t solve this problem by recruiting more of the same people to come into an office five days a week, only to get bored and leave,” warns Catherine Myszka ChMC, partner at April Strategy. This is “an opportunity for consultants to show clients how to use talent shortages as a lever for transformation”.

Here are four ways that consultants can help clients turn tight labour markets to their advantage.