A cauldron of economic, social and health challenges have boiled over in the past decade. Brexit and COVID-19 are just two of the factors that are exacerbating the issue. Among many impacts, this has caused a severe skills shortage. In turn, this has sparked wage inflation and a war for talent.

With less immigration to these shores, and the doors to cheap and flexible workforces from the European Union firmly shut, the UK is experiencing growing job vacancies. Official figures showed there were around 1.25 million vacancies in the three months from October to December 2021, a quarterly increase of 127,800 and an increase of 462,000 on the pre-pandemic level in January to March 2020.

Companies whose employees are from a diverse pool are best placed for a new economic reality.

Accountancy firms, particularly the Big Four, have stepped up efforts to hire school leavers in recent years, despite focusing on graduates in the past. This is not unique to accountancy firms; UK employers across the spectrum plan to diversify their intakes with more school leavers. More than 70% of employer members of the Institute of Student Employers now say that increasing the social diversity of their intake is a high or medium priority, compared to only 36% in 2015.

“Following Brexit, we are beginning to see clients look further afield to attract talent from all over the world and this will continue. We also recommend that companies work with young people in schools, universities and further education colleges to help broaden their horizons and open up opportunities,” says Mike Snape, partner at transformation specialists Oliver Wight.

Some industries have fared worse than others in the pandemic, particularly hospitality. Ronan Harte, CEO of BaxterStorey, in-house caterers to retail, banking and manufacturing companies, says a more daring approach to both retention and recruitment is required in those sectors.

“The pre-existing skills gap has only grown over the course of the pandemic. It’s essential we engage with pupils in schools, diversifying where we recruit from, giving young people more insight into career journeys and showcasing training programmes, the variety in workplace locations and the availability of flexible working,” Harte says.

Companies are at different stages in D&I development. Some employers have begun with actions ranging from initial focus groups, collecting personal information and bias training. Others are applying blind recruitment, setting stretch targets and reducing their pay gaps, the CBI says. The most advanced have linked D&I to remuneration. But most employers now realise that diversity makes good business sense.

“We are seeing employers do two things. They are looking at their local community to address skills shortages, some are embarking on recruitment PR strategies to address this within schools and even prisons. In addition, the success of remote working has meant that companies are casting their net wider,” Snape says.

The Social Mobility Foundation revealed a surge in participation in 2021 for its Employer Index, the UK’s benchmark for social mobility, with more than 200 companies competing for recognition. This compares to 119 in 2020 and 125 in 2019. KPMG, Grant Thornton and PwC featured in its top 10.

The World Economic Forum’s 2020 Global Social Mobility Report estimated the cost of low social mobility to the UK economy at £140bn a year over the period to 2050, amounting to £1.3trn in lost GDP between 2010 and 2050.

KPMG is taking steps not just to ensure social diversity in its lower echelons, but is aiming for 29% of its partners and directors to be from a working-class background by 2030. It has also begun publishing its socio-economic background pay gaps for the first time.

The UK has an ageing population and older people increasingly wish to work for longer, perhaps in a part-time role. Retaining older workers will become increasingly important for employers and the economy. This is, rightly, another growing area of focus for employers.

Once on the D&I journey, nurturing talent and upskilling will be critical to build a more resilient and adaptable workforce for tomorrow. Employees want to learn new skills and ensuring progression can also reduce organisational risk, as well as safeguard long-term employee satisfaction, business performance and staff retention. All of which employers need right now.