There has been a steep increase in businesses hiring temporary staff, freelancers and contractors this past quarter (27% vs 16%. A 69% increase in the proportion of companies).
The latest Hiring Trends Index by Totaljobs, which surveyed over 1,000 HR Decision Markers in the UK, revealed that 3 in 5 (59%) businesses are experiencing increased competition to find the right skills, rising to 74% of companies with over 1,000 employees.
These skills shortages have created a notable change in candidate expectations compared to pre-pandemic levels. 75% of employers say that candidates have higher salary and benefit expectations, with 69% claiming that demands for remote working have now created a barrier to filling positions.
As a result, 25% of businesses are investing in AI and training to fill these gaps. Over a third of those taking action (34%) are already using AI to supplement their workforce.
Employers pivot towards skills-based hiring
In response, the majority (85%) of businesses are using at least one skills-based hiring approach. 43% have updated job adverts to focus specifically on key skills and competencies, and a third (34%) have trained their hiring managers to conduct interviews focused on competency.
A further third (34%) have adjusted screening criteria to expand talent pools, with a fifth (20%) removing university degree requirements from their job adverts to help widen the search. A quarter (26%) of employers plan to increase efforts to diversify hiring in Q2.
Benefits of a skills-based approach
96% of businesses that deployed at least one of these tactics have reported benefits in hiring, with 39% claiming it has improved talent attraction. Over a third (35%) said it helped them find better candidates, with 34% stating that it has improved candidate engagement.
31% went as far as to say that skills-based hiring has improved the diversity of their talent pool, and 29% claim it has reduced time to hire.
Incentivising upskilling
Of those employers who are taking active steps to address skills gaps in the next three months, 88% are rewarding staff that had successfully completed a training or certification program. Half (50%) had met this upskilling with career progression or promotion opportunities, with 44% offering a pay rise in return.
In addition to upskilling existing talent, 50% of employers intend to use recruitment to address critical shortages, while 40% say that they will increase salaries to attract talent with the required skills.
Despite these immediate steps that businesses have taken, the research found that only a fifth (21%) have conducted a skills gap analysis to help with workforce and succession planning in the long-term.
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