Looking through the lens.
Perhaps the most notable change over the month of October has been the closure of the Coronavirus Job Retention Scheme (CJRS) – or Furlough – as it was more commonly known. This was undoubtedly the star performer of the government’s coronavirus support efforts. Despite costing £70 billion, it kept unemployment low as the country endured its worst recession in 300 years. The wages of 117 million workers were covered over its tenure with as many as 2.3 million working days spent in full or part furlough.
As the scheme came to an end, data from the ONS inferred that the labour market appeared robust. In broad terms, the number of vacancies was at an all-time high; nearly every sector could boast an increased demand for staff as we veer a little too quickly towards the festive season.
October also revealed the Chancellor’s spending plan and budget. In it, Sunak was optimistic. He confirmed that the economy has recovered better than was expected and that we could expect pre-pandemic levels of stability by 2022. He detailed several important measures that he believed would continue to encourage wider economic growth and would support both individuals and the businesses they work in.
Our recent blog goes into more detail about how the October spending review affects the tech sector.
Much like our September review, the data from KPMG and REC appears to remain positive. The spikes are still ‘spiky’, but those steep curves from the last 6 months are continuing to flatten in most respects. However, it is worth pointing out that August’s starting point was a record breaker!
Here is what the data from October says. These are the highlights, and just like last month, we’ll add in our experiences and thoughts as we go along.
Vacancies & Hiring activity.
The month of October continued the 9 month run of increased demand for staff across the UK. Both permanent and temporary vacancies saw a lift in vacant positions. However, despite this, both models experienced a month-on-month softening.
October’s hiring activity remains consistent with the patterns of previous months. Both temporary and permanent placements have seen steep rises but show the softest rate of expansion than the 6 months before it.
Once again, it is permanent appointments that have seen most of the placement activity. Although still high, October’s rate of expansion was much less than the all-time high of August. Looking more closely at the data it reveals that of the 4 regions of the UK studied, it was only the Midlands region that reported a growth in permanent placements. The other three; London, the South and the North all detailed a softening in this metric, despite reporting numbers above the neutral base mark.
This softening of actual placements though does not appear to be down to a reduction of vacant roles or hiring needs. Instead, recruitment professionals and industry experts are attributing the softening to the lack of candidates on the market.
Official government data from the ONS reflects this. Over the third quarter, the number of UK vacancies stood at just over 1.1 million. This is up from 1, 036, 000 in the three months to August. Notably, vacancies have more than doubled compared to the same period in 2020. The figure is also up considerably from the pre-pandemic level of 811,000 at the tail end of 2019.
Our thoughts on hiring activity.
This is something we can confirm here at Ignite. We are enjoying an abundance of roles to work on and are loving the challenge of finding candidates with the skills and experience to fill them. Our recruitment team have a large professional network of candidates to resource from, and this passive network is proving to be a fantastic resource. Our clients are coming up trumps with some truly interesting roles and projects. Both enticing and exciting, these roles are now encouraging applications from candidates who weren’t actively looking for new roles.
Vacancies by sector.
The demand for permanent workers across all 10 monitored job categories grew across the 4th quarter. It is worth noting that these vacancies were more distinct in the public sector.
Here at Ignite, our recruitment focus is on the IT, tech, digital, and data sectors. Within these, the skills most in demand are;
- Project managers
- Automation testers
- Business Intelligence
- Cyber security
Our experience here at Ignite would echo these. We’d agree with these categorisations. Our clients are issuing briefs that focus on growing their development and engineering teams.
In short, October’s data confirms that the shortfall of candidates remains severe. The availability of applicants fell again as we entered the 4th quarter. As in previous months, this has been attributed to an increase in demand, widespread labour shortages, fewer foreign workers, and a continued hesitancy for those in work to seek out new roles.
It is a great time to be a skilled tech candidate looking for work. Not only are there an abundance of meaty, interesting, and demanding roles on offer, you can expect to be paid handsomely. Permanent starting salaries lifted again throughout October. Candidate scarcity and a demand for staff have put pressure on employers to attract and secure the interest of applicants.
In fact, both permanent and temporary wages have increased at the quickest rate in 24 years since this sort of data collection began.
Our thoughts on salary.
Salaries are an interesting metric. We would wholeheartedly agree that we have seen a lift in the salaries and benefits packages on offer over recent months.
However, we have noticed an interesting aside. The pandemic has caused many professionals to reconsider their options and employment models. We have noticed a growth in the amount of senior and mid-level professionals who have undergone a period of re-evaluation. These candidates are considering a drop in pay to ensure that they are doing a job they are passionate about and that fits in with their lives. Candidates who are looking to refocus their professional ambitions are aware that they won’t get “anywhere near” their senior salaries and are happy to take considerable cuts to ensure the work they are doing is aligned with their wants and needs.
In sum, the data remains heightened. Businesses are undoubtedly on the hiring treadmill and are being stonewalled by candidate shortage…with base-level candidate scarcity and high demand the main barriers to filling those needs. However, as we gear up to a festive period it will be interesting to see if a period typically full of reflection and new resolutions helps to grow this pool.
Despite the continuing hiring rush, these numbers are generally softening month on month. Perhaps this will continue as the UK begins to work toward a BAU following a considerable period that we only can generously describe as turbulent.