Small businesses are facing a major crisis in recruiting staff, a report from the think tank Demos warns today. Recruitment 2020: How recruitment is changing and why it matters warns that whilst demographic changes across the UK demand greater workforce diversity, it is beyond the reach of small businesses which lack the resources to invest in new recruitment practices. It calls on the government to offer support by holding the 25 publicly funded Sector Skills Councils to account on developing diversity within their sectors.
The report argues that with only 20 per cent of the UKs workforce likely to be white, able bodied men by 2010, investing in a diverse workforce now is essential for long term success. It warns though, that for small businesses these long term needs are outweighed by more immediate cost concerns.
The report identifies a number of investments needed to attract diverse candidates for jobs, with companies needing to retrain recruitment personnel as well as exploring new ways of proactively reaching out to different communities. This includes advertising vacancies in a variety of minority ethnic press, proving more expensive than mainstream media advertising.
Recruitment 2020 argues that while big businesses are able to make these investments, small and medium sized enterprises (SMEs) lack the resources to do likewise, leaving them behind in the race for talent.
The report says that:
“Highlighting the ‘business case’ is a comfortable position for politicians to adopt (it absolves them of responsibility beyond stamping out clear cases of racism and discrimination); it is a fortuitous position for businesses and business lobby groups to take up (it absolves them from more legislation to comply with) and it is a natural position for campaigning groups seeking to promote social inclusion (it fits with their own values and worldview).”
“But all of this costs money – often more money than is available to SMEs acting alone. Many SMEs simply do not have the same economies of scale available to investment banks or large retailers, who are able to spend relatively large amounts of money - yet devote relatively small proportions of their overall turnover - on these activities.”
To help SMEs draw from a more diverse talent pool, Recruitment 2020 calls for the network of 25 Sector Skills Councils to adopt a new core goal of encouraging workforce diversity. While some individual agencies have set themselves workforce diversity objectives, it is not currently one of the four aims that they are held to account to by the government. To bring about a more concerted effort, the report proposes a fifth core goal:
To attract the widest possible pool of talent into the industry - involving new and different people from all backgrounds to work and prosper in the sector.
Duncan O’Leary, co-author of the report said:
“If we want a truly representative workforce across the UK we’re going to have to stop relying on market solutions that simply don’t exist for many organisations. Recruiting staff from all communities requires time and money that many smaller businesses just don’t have. If the government doesn’t help out we’re going to see small businesses looking less and less like the society they’re working in, as they’re forced to make do with an ever shrinking pool of easy to reach talent”
The report makes a series of proposals for the Sector Skills Councils to meet the diversity goal:
- Advertising campaigns targeted at minority groups
- Recruitment fairs in disadvantaged areas
- Match-funding diversity training
- Facilitating work experience placements
Recruitment 2020 also argues that workforce diversity is not the only challenge recruiters will face over the coming years. It identifies a series of social and technological changes that will demand new working models in the recruitment industry. In particular it warns that the increase in quality graduates over the next 10 years will mean recruiters have to work harder to attract the best talent. With candidates increasingly demanding employers match their own values, the report warns that the internet will be used to shine a light on companies that fail to do so. It calls on the recruitment industry to build personalized relationships with candidates, acting as a bridge to build trust between employer and potential employees.
For more information, an advance copy of Recruitment 2020 and to arrange interviews with the report’s authors, please call Mark Fuller on 0207 367 6325
Recruitment 2020 is based on over 9 months research, including over 40 expert interviews and workshops with figures from the recruitment industry, employers, civil servants and academics
The report will be launched at a central London event on the morning on April 26. Contact Mark Fuller for more details and media accreditation
The Report has been produced with the support of The Recruitment and Employment Confederation, and The Guardian
The Guardian has a long-standing commitment to the recruitment market, delivering a range of job supplements 5 days a week. It carries more jobs than the rest of the quality press put together and its jobsite, guardianjobs.co.uk, attracts over a million unique users a month. This means the Guardian is able to deliver a unique recruitment advertising platform, both in print and online.
The Recruitment and Employment Confederation is the trade association for the UK’s £24.8 billion private recruitment and staffing industry with a membership of over 8,000 businesses and more than 8,000 recruitment consultants. The REC is committed to raising standards in the recruitment industry and requires that all members sign up to its Code of Professional Practice. Its Industry Research Unit, launched in late 2005, aims to offer better research on the UK recruitment industry. The research also enables the REC to demonstrate the economic and social value of recruitment and to increase its capacity to speak with authority on other industry issues. For more information, visit the website, www.rec.uk.com or call 020 7009 2100.
Demos is the think tank for everyday democracy, the idea that all people should have greater influence over factors that effect them and their communities.