At the close of Q2, the data suggests that despite concerns over an uncertain economic outlook, the jobs market continues to be resilient. Broadly speaking, though there are small changes to the trends we have seen in the first 6 months of the year.
The headlines in UK recruitment remain the same, but there are new developments if we read between the lines.
Most notably perhaps, there have been significant increases in the number of job seekers looking for new roles. High levels of inflation have created an environment where people are looking to increase their earning power. Alongside this, many organisations are restructuring and streamlining their work force to become more cost-effective.
So how is the UK’s recruitment landscape being affected by these changes in candidate numbers? And are the organisational restructuring efforts affecting the number of open vacancies and the hiring confidence of business leaders?
The recruitment landscape – June 2023.
Permanent vs. temporary markets.
Although still noticeable, June saw a softer rise in the demand for staff. Among both the permanent and temporary markets, job vacancies continued to expand but the upturns were well below the respective long-term averages. Also to note, the temporary market recorded the stronger of the two expansions while the latest increase in the number of permanent vacancies was the softest in the current series of expansion since March 2021.
Public vs. private sector.
At the end of Q2, the demand for staff prevailed across both the public and private sectors. Permanent roles in the private sector saw the softest rate of expansion since February 2021, while the strongest demand was for permanent staff within the public sector.
This data allies with the new government initiatives around recruitment drives for public sector organisations. The first ever NHS Workforce Plan was published at the end of June and is aimed to put staffing on a sustainable footing and improve patient care.
Vacancies by sector.
In the permanent market, vacancies expanded across June. Among the sectors studied, there were 2 notable exceptions. The IT & Computing and Retail sectors both recorded vacancy downturns.
The temporary market mirrored the perm. Within this market, there were also 2 exceptions. This time IT & Computing was joined by Construction as registering declines.
Skills in demand.
Within the IT and Computing sectors, there is a continuing trend over the most in-demand skills.
Once again, within both the permanent and temporary markets, developers were in high demand. So too were cyber security professionals and software testers.
Here at Ignite we can certainly attest to the latter. Our clients are seeking QA testers at every level. This is especially true among our fintech clients. Within such a growing market competition is fierce. Responsive, secure, and robust fintech products are essential to ensure customer retention.
Are you interested in reading more about fintech recruitment? Read our recent blog on how to address the Fintech skills gap here.
ONS data confirms that there’s an overall downward drift in vacancy levels. Numbers remain high though and stand at over 1 million. This is +27% higher than pre-pandemic levels.
Placements and Billings.
Did the increase in vacancies convert into placements and billings?
There was a sustained fall in permanent placements in June. This last drop extended the current period of decline to 9 months. Recruiters reported that this continues to be driven by uncertainty over the economic outlook. The fallout of which is that recruitment freezes and delays in decision making has led to a slowdown in hiring.
Permanent placements fell across the UK apart from the north of England which registered its first upturn since February.
On the flipside, there was a further increase in billings created from short term staff. Billings within this market have expanded in each of the last 35 months.
Although the rate of growth is fairly mild, June’s numbers did quicken slightly from May’s 7 month low.
Once again, the economy and inflation rise have been behind the seeming preference for temporary staffing solutions. Clients are preferring the flexibility that short term staff can offer.
London registered the most dramatic increase, while the north was the only region to report a decline.
Continuing recent recruitment trends, June reported an increase in the numbers of available staff across the UK. This latest rise makes June the latest in a 4-month period of growth.
However, June’s lift was rapid and was the most acute since the end of 2020. This coincides with pandemic redundancies. Outside the pandemic period, though, June registered the steepest upturn in candidate availability since November 2009.
Permanent candidate availability.
Within the permanent market, we saw a sustained rise in active jobseekers. This number has grown as a result of high redundancy rates and people being driven back to employment to try to combat increased costs of living. It was also reported that people are seeking new work in an attempt to look for roles that are more accommodating in terms of flexible working and remote working options.
London saw the sharpest upturn of available candidates.
Temporary candidate availability.
Once again, the temporary market saw an upturn in candidate numbers. Not only was June’s lift a sharp month on month increase, but it was also the steepest recorded in 18 months.
The growth in temporary candidates was strongest in the Midlands.
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Pay and salary.
The average starting salary paid to permanent workers continued to increase in June. Though still far above the average, the rate of growth softened for the second consecutive month and was the least pronounced since April 2021.
Once again, the north of England registered the steepest upturn, and the south recorded the softest.
Within the temporary market, there was also an increase in the daily and hourly rates paid to short term staff. This extended a 28-month run of growth. Echoing the permanent market, this too was the softest rate of inflation since April 2021.
Data from official sources outlines that British workers are enjoying the joint strongest rate of pay growth for just over a year at +6.5%.
Private sector earnings grew +6.7% YoY in the three months to April and was the steepest seen since November last year. Meanwhile, over in the public sector pay increased at a rate of +5.6% taking public sector wages to an 18 year high.
As we draw a line under the first half of 2023, what should we expect looking forward?
Long term progress relies upon the UK continuing to be a great place for investment. Opportunities to capitalise on the growth in candidate availability must be taken. This includes ensuring that organisations are people focussed and that support is given to those looking to develop their skills and talents. Inclusive, family friendly back to work initiatives are also ways in which the government can draw the economically inactive back to the workplace and employers must continue to create and develop internal policies that encourage and welcome growth in its workforce.