Will the omicron variant further decimate the job market?

Businesses need to adopt a culture of learning and give unemployed groups the right guidance and training on where and in which sectors the demands greatest for skills are, writes Salvatore Nigro

In October, UK job vacancies had reached the highest number since records began in 2001 (Rui Vieira/PA) (PA Archive)

Britain and continental Europe’s labour markets are at a critical point. The number of UK job vacancies has continued to rise significantly and in October, reached the highest number since records began 20 years ago.

Despite this, 69 per cent of companies across Europe are currently reporting talent shortages. This vacancy paradox is occurring at a time when more than 140 million full-time jobs have been lost across the world, and more than 3 million under 25s are currently unemployed. This reflects skill shortages which are already having adverse consequences on the productivity and competitiveness of European enterprises.

According to a recent World Employment and Social Outlook report by the UN, “all countries have suffered a sharp deterioration in employment and national income” during the pandemic, which has aggravated existing inequalities, particularly among young people, and risks long-term scarring effects on workers and enterprises. This has created an “unparalleled labour market crisis” that will affect the employment market for years to come.

Now, with the Organisation for Economic Cooperation and Development (OECD) warning that the new Covid variant could mean severe global consequences, it begs the question of whether omicron will further hamper business recruitment, particularly in the wake of the “great resignation”?

Certainly, the risk is high. The Office for National Statistics (ONS) has already announced a record number of job vacancies, largely created by the economic consequences of the pandemic. And while many are describing this as creating a “buyer’s market”, the truth is that the skills gap remains one of the most crucial challenges to European governments.

JA Europe works in 43 countries across Europe and is known in the UK as Young Enterprise. From our experience, much of Europe is heading towards a digital skills shortage disaster, with fewer than half of all employers believing that young people are leaving full-time education with sufficient business skills and digital knowledge.

The data shows that while there is a lack of digital skills, there is not a lack of talent. Unemployed groups are simply failing to meet workplace needs due to a lack of investment in training and upskilling. For corporations and European governments, the issue is alarming.

Those from a lower socioeconomic background, for instance, are experiencing significant limitations in terms of digital participation and technological skills, mainly down to not having the financial resources to buy IT equipment or pay costly internet subscriptions. These issues were highlighted in a recent Europe-wide study by JA Europe, supported by the NN Group, where it was revealed that the pandemic has further damaged the career prospects of the most vulnerable young people.

Very few employers take these issues into consideration during the hiring process, which is exacerbating the digital skills gap in the labour market. So, while the question is simple – how do we get more unemployed people into the workplace in the current climate? – the answer is as multifaceted as the causes.

What can be said is that businesses across Europe, of all sizes, need to work more effectively with government agencies and nonprofits to introduce catch-up schemes, training and reskilling programmes and job guarantees, to help prepare current and future employees for the world of work.

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There are many ways this can be done, including creating apprenticeships for the unemployed, engaging prospective employees with coaching and mentoring, hiring diversity officers and ensuring openings are accessible online and offline, whether that’s through career fairs or jobseeker organisations.

Businesses also need to adopt a culture of learning and give unemployed groups the right guidance on where and in which sectors the demands greatest for skills are. Only by taking these steps can we meet the needs in manufacturing, logistics, data and IT, sales and hospitality, that are continuously and desperately sought by employers.

With pandemic-weary corporates now trying to assess the potential impact of the omicron variant, employee retention and sourcing the talent is crucial. Talent is universal, but opportunity is not, and businesses that focus on inclusive recruitment schemes will be in a much stronger position to face future challenges and new Covid variants.

Salvatore Nigro is the chief executive of JA Europe, a provider of education programmes for entrepreneurship, work readiness and financial literacy