The shrinking labour market-what's it all about?

Recruitment and Retention are major subjects of conversation in the business world, and indeed in the media in the UK at the moment. Having enough people to do the work is the biggest issue facing organisations of all sizes in all sectors. I've never experienced such a tight labour market in my entire career and many others are saying the same.

I was interested to see in the media on Friday that the Bank of England is predicting that our labour market in Britain will remain smaller than pre-pandemic with their modelling indicating early retirees are unlikely to return despite any efforts by the government to entice them back. I found myself reflecting over the weekend that in reality it may not be within the government's power to entice people back to the labour market but why do I think that?

The government is working on tax breaks and pension pot changes in the hope that it's financial decisions that will bring people back but that makes an assumption that they made their decision based on money. My experience says that may not be the case, certainly not for many who've left the workforce. Now don't get me wrong I'm not saying the money isn't a factor but for me that's an enabler, not a prime decision motivator for a lot of the people we're talking about.

If I'm right & the conversations I've had with people who've left the labour market because "lockdown made me realise I'm not enjoying my job and life's too short to keep doing something I don't enjoy when I don't need to" reflect a large number of the half a million people who have left the labour force since the start of Covid anything the government does with taxation and pensions is only going to speak to a small percentage of that group.

Now I'm incredibly lucky. I love my job, it brings me joy. Easy for me to say right? I'm in control of my work and diary with an amazing team around me. That's kind of the point though. If someone enjoys their work they're more likely to stay doing it even if they can afford to give up work. Conversely if they don’t enjoy their job they'll be out the door the minute they can afford to. Don't get me wrong I know we're all different and for some people leaving work would be purely a financial decision but what about those where it's about the enjoyment? The only organisations that can affect that portion of the population are the employers themselves.

I understand that I'm in a privileged position to be able to think like this. There's a reason Maslow's Hierarchy of Needs is still referenced 80 years after he developed it-because it's true. I can only think about the joy of work if I have enough income to put a roof over our heads and food on the table but the fact is many of those who've left the labour market are in a financially stable position and despite the government's hope that the cost of living crisis might drive them back to work that doesn't seem to be happening.

Now our members are struggling with recruitment and retention at a time when there's a lot of work in the pipeline but I'm noticing some of them trying to do something different. They're talking about the values of the organisation, about the purpose of the role and about the team dynamics as much as about the salary. Hopefully this will stand them in good stead.

If you're looking for some hints and tips on Recruitment and Retention our Professional Services Group pulled together a handy booklet. Don't forget we also have members who can support you.

What do you think? Have I got it all wrong? Is it all about the money? I'd love to know your thoughts.