Employers looking to upskill workers as pay rises slow

As inflation hits and with ideal candidates thin on the ground, companies are considering more long-term ways to build the perfect workforce.

upskilling workers


Almost 40% of employers intend to upskill their workers, while 28% will advertise more flexible jobs in a bid to fill vacancies, according to new data.

New research by the Chartered Institute of Personnel and Development (CIPD) reports 45% of UK employers report having vacancies that are hard-to-fill and almost two thirds anticipate problems filling vacancies in the next six months.

With inflation biting, pay increases are less likely to occur leaving employers looking for other solutions.

“If the ability to award pay rises is limited, employers can look at the total employment offer,” said Jonathan Boys, labour market economist for the CIPD. “Financial wellbeing support can make a difference, as can revisiting the mix of benefits offered to make sure they work hard for employees, especially the lowest paid. This includes designing jobs that include ample flexible working options. A combination of pandemic induced re-evaluation and a tight labour market have pushed flexibility to the fore. Right now, it’s a candidate’s market and that means new recruits have more power to dictate the terms that work for them.”

While raising wages is a quick way to attract recruits, a more holistic approach is likely to be better for employees in the long-term.

“Our research also suggests that employers are running out of steam on their ability to increase pay any further, so they’re switching their focus to retention and keeping their existing workforce happy,” said Boys.

CIPD’s quarterly Labour Market Outlook surveyed more than 2,000 employers across all sectors of the economy in last month about their hiring, pay and redundancy intentions for the second quarter of 2022.

The data suggests that the low unemployment levels and lack of candidates could be a drag on growth, meaning that upskilling and improving productivity will be key.

Added Boys: “After years of falling employer investment in training, it’s encouraging to see a renewed focus from employers on upskilling the existing workforce as part of efforts to address recruitment challenges. Reform of the apprenticeship levy could do even more to boost the latent appetite of employers for investing in training and development, as they could spend the levy in a way that best suits their training needs.”

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