The World Health Organisation may have declared recently that Covid-19 is no longer a global health emergency, but its impact on the automotive industry remains a clear and present danger – particularly when it comes to recruitment. 

If the pandemic ushered in a new culture of flexible working, we now seem to have settled into a period of commercial 'long Covid', with remote working entrenched in corporate life and job candidates becoming ever more demanding in terms of extra benefits.

The option of working from home is no longer seen as a perk but a fundamental human right, leading emboldened candidates to add new elements to their wish list before signing on the dotted line. 

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Many want to talk about a four-day working week and, with the problems faced by the NHS, they want comprehensive private health insurance for themselves and their families. And how about fully paid volunteering days written into their contract?

All of this is being made possible by the chronic skills shortages right across the automotive sector, which I and my colleagues at Ennis & Co documented last year in our research paper, Skills Evolution Road Map 2025.

With businesses competing with other sectors for a limited talent pool, candidates know they are in a sellers’ market and are pressing home their advantage.

But what is good for candidates can spell danger for the wider industry. Flexible working is here to stay (and is being positively encouraged by both sides of the political spectrum in the UK without them fully understanding the impact on business) but it is simply not practical in certain corporate environments. And if demands for a four-day week continue to gain traction, there will be massive implications for how organisations run their business.

While companies must do what they need to do to attract the best talent in today’s incredibly challenging labour market, simply throwing money at candidates and acceding to every demand can only exacerbate the long-term skills problem by fuelling wage and benefits inflation. 

Productivity in the UK already lags well behind France, Germany and the US, according to the most recent Organisation of Economic Co-operation and Development (OECD) figures. Increasing the labour cost base will only widen the gap among the G7 nations.

I cannot pretend there are any easy answers, but businesses must strike the right balance between what they can say yes to in employee contract negotiations and what is beyond acceptable and workable.