As Q1 continues and January 2023 comes to an end, employers continue to show some caution around hiring. Double digit inflation, high energy prices and an uncertain economic climate are slowing decisions and, in some cases, forcing employers to hire freezing until the situation becomes more stable.

While this is true, the sheer volume of vacancies for skilled roles means that employers have no choice but to remain proactive in their search for talent.

Temporary relief.

The solution many are turning to is the temporary market. Contract workers are both quick to hire and ready to hit the ground running. The short-term nature of these contracts requires only a small level of employer buy-in and affords the flexibility to end or continue the work as needed.

According to the Recruitment and Employment Confederation (REC), temporary workers formed the backbone of the UK economy in 2022. They anticipate this trend will continue into 2023; the demand for contract or temporary staff will endure.

The recruitment landscape. January 2023.

Here is our debrief of the recruitment data from across the UK in January.


The REC’s Labour Market Tracker has reported that there were 184k new jobs listed in the first week of January; a 24.5% increase from the same week last year. In the same period, the number of active national job postings stood at 1.53 million.

Data from the ONS also confirms the need to hire. They report that the vacancy numbers across the UK are 40% higher than pre-pandemic levels. In the 3 months to Feb 2020, the number of published jobs was 823k.

These numbers are evidence that despite the UK economic uncertainty, the scale of the overall shortages within our labour market is forcing firms to hire.

Staff vacancies.

UK recruiters have reported a growth in vacancies across January, demonstrating the ongoing upturn in demand for workers. The growth has remained constant, but January’s numbers indicate the rate of this growth picked up again for the first time in 9 months.

Permanent and temporary staff vacancies.

The lift in vacancies was seen among both the permanent and temporary markets. Permanent vacancies saw the quickest increase in 3 months. Temporary vacancies rose at a softer pace, but still outpaced permanent vacancy listings.

Staff vacancies by sector.

When it came to the differences between the public and private sectors, private sector vacancies exceeded those within the public sector.

The largest requirement was for permanent workers in the private sector, while the smallest was for permanent workers in the public sector.

Retail was the only area of industry where vacancy levels didn’t increase in January across both permanent and temporary markets. This is likely to be down to seasonal variations…in the run up to Christmas, we’d expect a boom in retail job adverts.

IT and Tech.

Within the tech and digital space, there was a reported lift in the demand for staff across the permanent and temporary markets.

The skills required within each were similar.

Developers, data professionals, cyber security professionals and software engineers were in demand. As you’d expect the contract market was more detailed. Python was highlighted as being a particular skill set in demand within the contract market.

Ignite says…

We’d agree with these in-demand job skills. However, we’d add that we have received several new requirements for marketing and communications leaders. This is a great indication that businesses are once again looking forward. They are optimistic and have their eyes on investing in acquiring new business at the start of the year.

Placements and Appointments.


For the 4th consecutive month, recruiters reported a decline in permanent appointments; another indicator that we are seeing a more cautious approach to new hires. Concerns around the economic climate have caused hesitancy among decision-makers with some markets reporting hiring freezes.  The ongoing candidate shortages too, have contributed to this trend.

This has been true across the UK, with the Midlands area seeing the steepest rate of decline.


In the contract and temporary market, recruiters reported another month of growth with billings increasing again across January.

This rate of growth was the best since September last year and extends the current period of growth to over 2 years.

Anecdotal evidence from recruiters suggests that employers are favouring short-term staff within a tight market where vacancies need to be filled quickly.

Steep billing numbers were seen in the north and London, with milder expansion in the south of England.  The only area to buck this trend was the Midlands which reported a modest decline.

Staff Availability.

The start of 2023 tells the same candidate story; we are still witnessing a solid reduction in candidate availability.

The rate of deterioration is easing, however. Despite the continued fall, candidate shortages slowed for the 7th consecutive month.  This was particularly true of permanent candidates, which fell at a much slower rate than the average in 2022.

Despite the ease, it was only London that reported a lift in candidate numbers across January.  This was true of both the temporary and permanent markets.

Pay and salary.

ONS data reveals that the rate of increase in pay has jumped +7.1% in the private sector and +3.3% in the public sector.  Employee earnings (including bonuses) have risen +6.4% year on year between August – November last year.  This rate of pay growth is among the fastest in the series’ history.

Our colleagues across the country report similar information. In the permanent market, starting salaries continue to climb. Although the rate of inflation continues to be sharp, it was the softest recorded since April 2021.  Candidate shortages and the cost of living have pushed up the salaries of new starters.

In the temporary market, there has been an acceleration in the daily rates paid to contract staff.  The pace of this growth was steep and well above the series average.

The Midlands reported the highest rate of inflation, whilst London reported the lowest – perhaps because contract staff in London were more expensive to begin with.

To sum up.

To sum up, we begin 2023 much the same as we ended 2022.  Double-digit inflation, rising costs and economic turbulence are taking their toll on both employer and candidate decision-making.

Vacancy levels remain high and the hiring intention, especially for contract staff remains strong.

The trends across the country continue to ease, and while these are still far from average series readings, the main KPIs seem to be levelling off.

New job?

Are you looking for a new tech job or contract assignment in 2023? Head to our jobs pages to learn more about all our great digital, tech and data jobs.

About the author: As Client Relationship Director, I am responsible for helping grow the new and existing client base of Ignite Digital. I work as a “trusted connection” with my clients and candidates aiming to deliver the best service I can to connect talent to opportunity.

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