As we motor through the early months of 2022 the recruitment landscape remains challenging for recruitment professionals.
The jobs market is still growing at the start of the year, with demands from employers continuing to rise.
Numbers from the Official of National Statistics confirm this. The data confirms that there have been further increases in vacancies across the UK. At 1,247,000 the number of open positions is the highest since the series began 20 years ago.
To put this into a more relatable context, the number of vacancies has more than doubled compared to the same period 1 year ago (+109%). This figure is also substantially higher than pre-pandemic numbers; +54% in the 3 months to February 2020.
So how have recruitment professionals analysed January’s landscape? Here are the monthly thoughts from leaders within our industry.
Vacancies & hiring.
The number of vacant roles remained consistently high in January. Despite this though, the rate of growth did slow and eased to its softest place since April 2021.
This was true across both the private and public sectors. There were some notable standout trends though. The highest level of vacancies was reported for permanent roles within the private sector, whilst the slowest was contract roles within the public sector.
In line with the last 11 months, recruiters reported that permanent placements remain above the average. These rose again in January across the UK, with the South of England being the region reporting the steepest rise.
Despite this continued sharp rise though, the rate of growth has mirrored the vacancy findings. The rate of growth has also dipped to a 3 month low; the joint slowest since Spring last year.
Within the contract market, there too has been a spike. Recruitment professionals have reported a rise in contract billings which echo the activity of the past 18 months. An increase in contract billings has been reported every month for the past year and a half.
Recruiters believe this drive has been accelerated by a requirement to fill vacant roles quickly, and an attempt to solve the permanent candidate shortfall.
The north of England was the region that saw the quickest rate of growth in the candidate market throughout January.
Vacancies by sector.
Recruitment professionals have confirmed that there have been increased numbers of permanent vacancies across all monitored sectors at the start of 2022. However, looking in a little more detail, it’s not surprising to us that the quickest rate of demand has been reported for IT and computing roles.
This is not quite so true of the contract market though. Within this area, IT and computing grew at the fourth quickest rate. Typically, it was reported that the care, blue-collar, and hospitality sectors were most in need of temporary staff.
This isn’t entirely surprising given that it’s these professionals who have been most heavily affected by the limitations placed on workers from the EU following Brexit.
Ignite says.
These are all assertions that Ignite HQ can attest to. We have continued to enjoy a large volume of permanent work and can also report a growth in the number of contract positions currently in our pipeline.
Contract requirements are certainly being used by clients to fill the immediate candidate need, while our current runners have had their work extended into the next 6 months.
Enquiries from new clients via our website are also up substantially, with active requests for talent solutions being sought proactively. This level of contact indicates strong hiring signals from SME businesses who are looking to expand their tech and digital teams following the uncertainty ushered in by the pandemic. The demand is there, but it’s the shortage of candidates that may limit the UK’s economic recovery in the longer term.
Candidate availability.
Once again, recruiters reported that total staff availability slipped again across January resulting in a further decline in candidate supply.
Although candidate numbers have been phenomenally low for some time, January’s data suggest this is the first time they have deteriorated since August 2021.
This drop was mostly driven by reports in permanent staff availability; temporary labour supply fell at a softer rate.
Supply has not met the demand for 12 months, but there has been an easing in the past 4 months. However, the rate of reduction in January was sudden and substantial. Once again, these numbers have been attributed to a trio of factors; a general shortage of workers, an increase in demand for staff, and uncertainty amid the ongoing pandemic.
Pay & salary.
Recruitment professionals have reported an ongoing increased rate of pay to permanent new starters since March 2021, and January was no exception. January’s rate of inflation was no different than we experienced in December, and only slightly less significant than November’s survey record.
Once again, pay and salary inflation has been linked to the battle for skilled staff among the ongoing skills shortage.
These thoughts were echoed across the UK, but as you may expect, salary rises were most steep in London.
The Office of National Statistics data supports this. The government body reported that employee earnings (including bonuses) rose across the UK by 4.2% year on year over the same three month period to January.
What does 2022 have in store?
Overall it’s apparent that the market is still roaring ahead at the start of 2022. Demand for workers across every sector continues to rise. Salary rates are still under pressure as businesses battle to attract new starters.
Of course, January piled on more challenges to businesses and individuals alike. The significant rise in energy costs will have an impact we can only yet anticipate. Cost of living and energy prices are now steeper than ever before. We expect this to have repercussions for salary and other remunerative strategies businesses will offer their new hires.
Businesses will have to tread a fine line between balancing their own costs with the requirements of attracting new talent.
It seems to us that this government has a large part to play in ensuring the continued recovery of the UK economy amid these new challenges. Not only must they strive to ensure and encourage investment, but they also must strategise for long-term solutions to the issues business leaders face. Workplace planning, training funding, and digital transformation must be prioritised to make sure the UK has the people with the skills required for the future.
Are you interested in how hiring has changed over the past 6 months? For more of our monthly updates, head to the Industry News pages on our blog.
