Like most aspects of life since the pandemic hit, the employment arena has been hit hard. But not just with uncertainty and hardship for many sectors like hospitality and leisure, but because of the fast pace to which things have changed in the last 18 months.
Take bar and waiting staff - thrown under the Covid bus in early 2020 with little support, not least for the owners of the businesses they were working in. Then, in an acute about-turn, suddenly becoming a rarity, sought-after and more expensive as hospitality opened up and customers returned eager to make up for lost drinking and eating time. It’s estimated that wage rates in some areas are up by over 11% on 2019 levels.
And lorry drivers. Notice all those empty shelves currently? That’s partly because there’s a shortage of 60,000 drivers right now due to a combination of the Pingdemic and thousands of drivers awaiting HGV tests delayed by lockdowns. The result is Tesco offering £1,000 joining bonuses and John Lewis raising drivers’ wages by £5,000 per year.
High demand and a shortage of supply will always lead to higher prices.
Then there’s estate agency. Do we think that our industry will be exempt from the most basic of economic laws? Well, it has been up until now due to the temporary hike in business that the property industry enjoyed thanks to Rishi Sunak’s magic stamp duty tree.
And as the market continues to flourish and labour dilutes, your people can start to call the shots. That’s about the size of it.
Now I’m not suggesting that Bairstow's or Foxtons are about to lose all their listers to Aldi’s campaign to lure more truck drivers. Or that London’s best estate agency branch managers will soon be seen front of house at The Ivy.
But my concern is that our industry may not be seeing what’s coming – a candidate-led market. This is further illustrated by:
The Recruitment and Employment Confederation and KPMG say the number of available workers plunged in June to the lowest levels since 1997
Job vacancies in the three months to June rose by 241,000 to 862,000 – the biggest quarterly increase since records began in 2001
1.3 million non-UK workers have left the country due to the pandemic
So what to do? I’m afraid that you’re going to have to put your hands in your pockets and increase basic salaries and probably commission rates too, which have stayed largely static since I can remember. 5% of banked fees are fine when house prices are rising at double-digit rates but not if they’re not. Frankly, it’s too little to be paying so many – especially when the hybrids are dishing out 70% fee splits.
In recent months I’ve seen wage inflation in the estate agency business rise by 10%. You can’t get away from that. It’s real.
But on the bright side, your ROI is still going to be pretty epic, isn’t it ;-)
I’m also seeing that good candidates have multiple options now – more than ever in fact. If you procrastinate when hiring, or you try to play hard ball or there’s a hint of bad faith, you’ll simply lose out. Times have changed, for now at least.
Plus, the counteroffer environment is stronger than ever. Make someone a job offer and you can be sure that their current employer will fight to keep them and this means that you have to bid bold and use speed to lead.
Remember this – ‘7 days’. At present you have seven days to interview, offer and secure a candidate. After that, they are gone. Dramatic? Trust me, I’m living and breathing this stuff every day and it’s a case of survival of the fittest for employers.
Bite the bullet. Hire now and hire well – if you wait, it’ll probably cost you in more ways than one.
*Josh Rayner is Founder and CEO at Rayner Personnel, a leading estate agency recruitment agency and an employment expert