Insights

Offshore wind has been one of the greatest technology success stories for the UK. The country has been able to establish global leadership by utilising it. The biggest offshore wind farm in the world is being built on the Yorkshire Coast. The Dogger Bank wind farm is bigger than Greater London, and when complete it’s going to produce enough clean energy to power well over 6 million homes. The UK should have great pride in the role that they have played in the adoption of solar wind.

The Three Advantages of Offshore Wind

There are three distinctive advantages to using offshore wind farms.

• Strengthens National Security
• Makes the UK Less Reliant on Importing Energy
• It’s Carbon-Free and Cheaper than Other Alternatives

It’s not all about energy though. It’s also about industrial strategy. At the end of the day, this is a technology that is required globally. The UK has been a strong leader in the quest for greener energy, so offshore wind can easily be seen as an inward investment. From job creation to new manufacturing facilities and even export opportunities, it’s safe to say that offshore wind is a game-changer.

Maintaining Momentum

It’s no surprise that other countries are fighting to keep up. Even though the UK has made a solid start and managed to break down a lot of barriers regarding offshore wind farming, one important factor to keep in account would be momentum. A recent auction has failed to bring forward any offshore wind projects, seemingly putting it on the back burner.

A lot of this comes down to interest and inflation. The cost of building huge infrastructure projects, such as offshore wind farms, have drastically increased. This wasn’t reflected in developer prices. That’s one of the reasons why the auction failed to generate the additional capacity the country needs to make good on energy security goals and targets.

While there is a limited relaxation regarding the rules for offshore wind farms, we need all the energy we can get. Homegrown energy is invaluable right now. Onshore can’t match offshore, in any way, in terms of both scale and impact. The UK is densely populated with limited land. With that in mind, the abundance of coastline is giving offshore wind advocates all the ammunition they need to make a solid case.

The UK Is at a Crossroads

Decisions will be made over the coming weeks, and they will decide whether or not we can recover the leadership status we once had. It’s make or break, and the next few years could decide if the UK ends up reaping the benefits of offshore wind farming, or whether it becomes another dead investment. If we throw everything we have into offshore wind farming, the benefits could be revolutionary.

Looking into the Future of Offshore Wind Farming

First of all, the prices that are being set by the government have to be sustainable. It’s also imperative to recognise the rising costs experienced by supply chains, and that this has impacted every household in the UK. The Administrative Strike Price is currently set around £60/MWh. In contrast, Ireland’s subscribed auction cleared at £74/MWh.

Sure, offshore wind farming will provide the country with some insurance regarding recent price spikes. Of course, you also get more security as climate action comes as part of the package. This makes It easier to justify creating new opportunities, as well as expanding the UK’s role in new green jobs. There are some other related reforms that aren’t connected to money. Extending contract lengths from 15 to 20 years, as the US have done, and extending capital allowance will help to cushion against increasing costs.

The UK Could be the Easiest Place in the World to Invest

The potential here could be great. By ensuring that the UK is the biggest and best place to invest, we could push an industrial renaissance. Green jobs aren’t a slogan. It’s a reality. When you look at the Dogger Bank wind farm, you’ll see that it supports 2,000 jobs. Upcoming projects include Berwick Bank, to the east of Scotland. This has the potential to create 9,000 jobs. Better national security, jobs, growth and investment are all benefits of pushing wind farms in the UK.

That being said, the UK has to be agile enough to seize the moment. If we don’t, it goes without saying that other countries will. The UK has been able to establish a competitive advantage with zero competition. Now, other countries are putting us in a global race.
To reference, Aesop’s fable, complacency hindered the hare, allowing the tortoise to win. It’s a solid lesson that very much applies to this situation.

The UK needs to pick up the pace, not slow down.

The engineering sector is in a constant state of disruption. Rishi Sunak has released a statement saying that a £20 billion cash injection is going to be invested in carbon capture and CCUS, which is going to fund a project in Scotland.

Vulcan Engineering have plans to expand in Rotherham, which is going to bring an influx of new jobs to the market. Projects that include the East West Rail are undergoing continual developmental progress, which is providing engineers with exciting opportunities. Even with all of this growth, the underlying skills shortage is still evident. STEM Learning have suggested that in technology, science, math and engineering alone, there is a shortage of 173,000 workers. Reports by IET indicate that 49% of UK engineering businesses are not able to recruit the skills they need to operate efficiently. In the construction business, there are 34,478 open positions for construction workers, roofers, and site managers. Only 2,870 people are currently searching for positions, however. There’s a risk that only one out of ten roles are being filled, which highlights the dire situation currently being faced by the sector.

The Current Shortage of Skills within the Construction Sector

The shortage of construction workers became evident when retrofit skills shortages stalled the process of plans to upgrade 19 million homes across the UK. The planned upgrade of cold and draughty homes required over 400,000 builders, however out of the 250,000 people who work in home maintenance, only 3,000 of them are retrofit coordinators. It’s estimated that 50,000 coordinators will be needed by the year 2030.

Delving into APSCo’s Report on Engineering

APSCo’s report also touches on the current skills shortage. Broadbean Technology provided the report and revealed that 36% fewer people are applying for jobs, which marks the biggest drop in the last two years. Even though numbers are falling, demand is high. Jobs are up 5% when compared to 2022.

Why is there a Skills Shortage?

There are many reasons why there is a current shortfall in UK talent. Emerging talent pools have exacerbated the issue. The OECD have indicated that less than 10% of UK graduates are engineers. This is far too low when compared to current demand. As the skills gap grows, the consequences of this shortfall become more apparent. While the government are focusing on improving STEM skillsets at an educational level, the action taken now will take years to become impactful.

The Importance of Immediate Solutions

Immediate solutions are needed as an interim option if current projects are to remain on track. This includes aiding contract professionals in filling current resourcing gaps. Off Payroll and Brexit have had a monumental impact on businesses and their ability to engage with temporary resources. This is unfortunately, the case on a global scale.

Off-payroll has had a lasting impact on the people who decide to work as contractors, as well as the number of employees who want to meet the compliance regulations for engagement. While in the near future, there aren’t going to be any changes to Off-Payroll regulation outside of the consultation sector, APSCo are striving to make sure that recruiters are heard. Regulation hasn’t been supportive of creating a flexible labour market, which given the scarcity of talent, is of great importance. What can be implemented on an immediate basis, are tweaks to the current immigration policy. The UK is lagging behind its European counterparts in terms of immigration options. This is especially the case for independent contractors and the self-employed.

Working Closely with Policy Decision-Makers

The public policy team is working closely with decision-makers to identify flexible options similar to those of Denmark, Germany, Australia and the Netherlands. Visas that are straightforward to obtain have to be available and accessible. They also need to mirror the general flexibility that Germany currently offers, as they are a leader on this issue.

Permitted businesses need to fall within the Standard Visitor visa. This could allow a short-term fast-track visa route for self-employed workers, as well as foreign employees. The Home Office did utilise fast-track visa applications last year, but this should be expanded upon, allowing for the leasing of visa holders in terms of registered sponsors.

If the new engineering projects in the UK are going to be successful, the underlying skills shortage has to be solved. The UK simply doesn’t have enough workers to support demand, but this could turn around quickly if new skill pipelines are opened.

The Hiring Trends Index from TotalJobs aids employers by giving them a glimpse of the latest data regarding the UK labour market. We’re going to delve into the second quarter of 2023 to see how businesses are using AI to recruit new talent, and how it is having an impact on the workplace. The Hiring Trends Index utilises insights from over 1,005 HR professionals, with the latest instalment having a prime focus on AI and its influence on the workplace.

Key Findings

• The Bank of England have Raised their Interest Rates to a 16-Year High
• Workers are Demanding Higher Wages to Accommodate Inflation
• The Number of Payroll Employees in the UK has Surpassed 30 Million
• Unemployment Levels have Increased to 4%
• 81% of Businesses Recruited in Q2 2023

Interest rates in the UK have now hit a 16-year high. They currently stand at around 5%. Economists expected the rate to drop from 8.7% down to 8.2% in Q2. Surprisingly, they plummeted to 7.9%. The Bank of England have reviewed the current forecast and predict that now, by Q1 2024, the inflation rate is going to stand at 5%. This is much higher than their prediction earlier in the year. On a positive note, the UK labour market has been experiencing a period of rapid growth. More people than ever are joining and the number of UK payroll employees has reached 30 million. With that in mind, the loosening of the labour market has brought about some consequences. Employment and unemployment levels increased to 76% and 4%.

Ongoing Economic Pressure

The working market is currently experiencing ongoing economical pressure. Workers are demanding higher wages to keep up with the current rate of inflation. The growth of regular pay has reached 7.3%, which is the highest outside of the pandemic. Some companies have started to utilise automation and AI, in an attempt to supplement their workforce.

81% of companies recruited in Q2 2023, which is more than Q1 2023. Vacancies have been dropping, but they are still above 1 million. This is 25% higher than pre-pandemic levels. The average hiring time decreased as well. It was 6.4 weeks in Q1 and 5.8 weeks in Q2.

40% of businesses have reported that they are now using AI in the recruitment process to screen candidates, schedule interviews, create job advertisements and also create interview questions.

A Look at the Last Three Months

Some key takeaways for the last three months include the fact that 81% of businesses recruited in Q2 of 2023. 1 out of 3 of those people, increased the number of employees working at the company. Employers are not likely to stop hiring altogether due to labour shortages. Vacancies now come in at 1,051,000 which is 25% lower than April of 2022. It’s still above pre-pandemic levels. Students have been joining the workforce, as are early retirees in an attempt to cope with the rising cost of living. This decreases the total of people who are economically inactive. Even though more people have been flooding to the workforce, the UK market is still somewhat tight. Those reporting long-term sickness has reached a new record, coming in at 2.55 million.

2023 Q3 Recruitment

Business confidence has also experienced a bit of an uptick at the start of the year. The majority of employers, or 57% of them have said that they feel confident in being able to recruit the people they need. 26% of companies plan to increase recruitment in 2023 with the top sectors being transportation, hospitality and leisure, and finally, medical health services.

Moving on to the second quarter of 2023, it is evident that wage growth has picked up once more. It has now reached a historic high of 7.2%. This is due to the increase in the national living wage, which stands at £10.42 for those who are over the age of 23. Economists are expecting a wage-price spiral, meaning wage growth could in-turn, fuel inflation and so forth. The current demand for higher wages is not likely to slow down the price increases regarding basic needs. This includes housing, food and energy. 4 out of 10 adults in the UK are finding it difficult to afford mortgage payments and rent, which has shot up by 25% since last month.

Labour shortages within the UK are also a contributing factor, giving workers a strong position for negotiation. For UK businesses to keep on growing and for them to stay on the current positive trend, they have to streamline their efforts in regards to retention. 16% of companies are now investing in technology, as well as automation in an attempt to supplement their workforce. As technology advances, it wouldn’t be a surprise to see companies lean on AI to cover basic tasks, while increasing productivity.

Integrating AI Into the Workplace

Currently, 53% of businesses use AI within the workplace, to some degree. 39% of small companies use AI tools in comparison to 50% of medium companies and 79% of large companies. The most popular use of AI would be in tech and IT, followed by operations and finally, PR and marketing. 1 in 5 companies say that they strongly anticipate they are going to use AI within their day-to-day operations before the end of the year.

So, that brings about the question. What do employees think abot using AI? This has been explored before, with the findings indicating that 2 out of 5 workers don’t think that they have the right skills to make the most out of the AI tools within their workplace.

Younger generations and office workers are generally more excited about the future and the innovations AI will bring to their industry.

While 56% of workers believe artificial intelligence will empower them to learn and develop new skills, 44% think AI would make their current skills obsolete. Businesses have to eliminate hesitations around AI and train staff to save time on tasks. This will have a positive impact on productivity. 20% of companies say that they expect to take steps to train staff to use AI properly so that they can boost their overall productivity. The top industries that are following this trend include financing and accounting, marketing and telecoms.

How are Businesses Utilising AI for Recruitment Purposes?

Over half of jobseekers have openly admitted that they would be happy applying for a job where a small part of the process is driven by artificial intelligence. This includes sourcing, screening candidates, creating job adverts and scheduling interviews. AI is helping candidates to save time during the application process too. They can use tools that include ChatGPT to polish their cover letters and CVs. Half of jobseekers have said that they would be happy to share their data with an AI platform, if they feel as though it would match them better to new and upcoming positions.

There are some concerns, however. 72% of people say that they worry about AI not picking up a number of blind spots, and they think that it should be mandatory for companies to outline how it is they intend to use AI in the recruitment process. One quarter of big businesses expect to increase the use of AI in recruitment by the end of 2023 and right now, it seems that the concept of using AI in recruitment is evergreen.

Julius Probst from the European Labour Market

When you take into account the fact that inflationary measures are in place, it seems that candidates are now being forced to explore opportunities that offer a higher salary. This is leading to increased movement within the job sector. This heightened sense of mobility is helping to underscore the battle for talent. Businesses now need to emphasise the need to exert additional effort when it comes to attracting and retaining the professionals they need. Companies are also beginning to recognise the value of the recruitment process, in terms of the skilled professionals they require.

Of course, as the job market changes, it remains more important than ever for businesses to embrace solutions such as AI. It’s the only way that they can stay ahead and secure the talent they need. By combining strategic talent management with AI, it seems that organisations can achieve their objectives much more efficiently given the current climate.

What’s your favourite drink?

Pink gin and lemonade without ice and I love chocolate milkshakes, Caffe Ginevra at our offices do the best one

Favourite restaurant in Newcastle?

I’d have to say Lola Jeans, nothing tops a Lolas burger. I went to Chilli Padi recently as well and that was great. I’m also known in the office for my home “fakeaways”, Chinese being a real strength.

How long have you worked for AJP?

4 years, I originally joined as an apprentice candidate resourcer working on low margin, mass recruitment campaigns and moved over to the Trades team about 2 years ago.

What’s your position in the company and what do you do?

I’m mainly a candidate resourcer on the Trades team but occasionally help other teams in resourcing for jobs. I work part time now as I’m also studying for a degree.

What did you do before working in recruitment?

I joined AJP when I was 18 years old after sixth form, this was my first ‘proper’ job but I’ve also worked as a waitress.

Why did you get in to recruitment?

I wasn’t actively looking for a recruitment role, I didn’t know what I wanted to do and this sounded interesting.

What do you enjoy the most about your job?

The craic in the office and placing people in jobs is very rewarding, I really enjoy the flexibility at AJP and the ability to fit work around my University schedule.

What’s the biggest challenge in your job?

Finding candidates! It’s my job and it’s getting harder and harder to find good people. Putting up and finding the patience to deal with people mispronouncing my name! I’ve been called Hayley, Amy, Edith, Elid and Eyelid.

How has AJP changed in the time you’ve been working for us?

We’ve grown as a team, people genuinely like each other and it’s nice to be a part of it. I feel I’ve grown as a person since joining 4 years ago as well and I’ve learned a lot since being here.

What do you like to do outside of work?

I love training at the gym, I often go to music festivals with my friends and I’m getting in to countryside walks with my boyfriend.

What’s your favourite drink?

New Zealand Sauvignon Blanc but also love a cocktail

Favourite restaurant in Newcastle?

Depends on what mood I’m in but I love Tapas and Chinese. I also really like Allards in Tynemouth.

How long have you worked for AJP?

Nearly 6 years

What’s your position in the company and what do you do?

Engineering Trades Manager. I manage our biggest account and also manage a team that recruits for all temporary trades contractors.

What did you do before working in recruitment?

I had quite a few jobs! I worked for the DWP, managed a wine bar and a coffee shop. I worked in HR for a company that’s now our biggest client and I was working in Assets for an Engineering company when Andy contacted me to discuss moving to AJP.

Why did you get in to recruitment?

Andy said I would make lots of money! I wasn’t enjoying my role and I didn’t know what to do for a career, I needed a change but I’d never thought about Recruitment before.

What do you enjoy about your job?

I have to say I hated it for the first 6 months! I now genuinely enjoy finding work for contractors. I find the engineering sector fascinating, learning how things are constructed and I really enjoy the banter with our contractors. I like our team, I like our office environment and, as a new mum, I love the flexibility with work hours and hybrid working.

What’s the biggest challenge in your job?

Finding Welders at the moment! Getting in to work on time and navigating the coast road, being late has cost me a lot in office coffee orders.

How has AJP changed in the time you’ve been working for us?

Watched the company grow and have a great team. The only thing that hasn’t changed is my laptop! When I joined we were still quite small and our systems weren’t the greatest and I’m pleased we’ve invested in a lot of the IT side of things like our CRM system which makes my life a lot easier.

What do you like to do outside of work?

Life has changed a bit since having my little girl, beach walks and coffee keep me alive. I also hate softplay!!

Finally, we've found an agency that has taken the time to understand our roles and been proactive in presenting candidates that other agencies couldn't find.

We started using AJP in January when they joined a PSL of five agencies, they have consistently outperformed the other four PSL members.

My consultant rings me each week, gets my pay right every time and has been totally open and honest with client feedback.

AJP are one of very few recruitment agencies to have understood our industry, company and requirements from the beginning.

We've used several recruitment companies but never come across a consultant who came to visit us before we'd even registered a job with them. They are genuinely interested in understanding our company.