The past few weeks have seen momentous events in our country. During the period of national mourning, we saw the nation come together to reflect and give thanks for Her Majesty The Queen’s service to our nation. We said goodbye to one of the constants in our lives for the last seventy years and welcomed our new Sovereign.
As we return to normality, we return to practical concerns about the shape of our market and the challenges to come, with inflation still high. Our jobs market is still the envy of many, and recruiters can still find many opportunities. Demand continues at close to the record highs we saw last year, although data is also showing that the pace of demand is now levelling off. We cannot hide from the fact that the economic picture over the Autumn and Winter looks more troubled.
A quick round-up for you to keep us updated on the market.
n August was another month of growing placements across temporary and permanent roles. While the post-pandemic jobs rush is now declining, there were no real signs of a slowdown in employer demand. There is a suggestion that the lowering of confidence in the market is driven primarily by candidates playing it safe, so it is no surprise that pay rates continue to rise, which is surprising considering increasing inflation. In this market, hiring companies need to think hard about the right approach to getting the skills they need, plus working with professional recruiters.
August witnessed very little growth in placements and vacancies slipped to an 18-month low (data collected 12-24 August). The KMPG and REC UK Report on jobs survey highlighted an increase in recruitment activity during August. August survey data also signalled a further easing in vacancy growth, which slipped to an 18-month low. Total candidate numbers fell at a milder but still rapid pace which combined with the increased cost of living has lead to further sharp increases in starting pay.
Weekly job postings since Summer have returned to levels last seen in April this year. Employer demand is still significant, but a cooling-off is no surprise. With inflation high, and employers concerned about the economic picture, some moderation in hiring from the sugar rush of the past year was predictable.
We are entering a new phase in our labour market. Workforce shortages make the impact of a slowdown in hiring much more unpredictable. It is far less likely that we will see much higher candidate availability, especially for roles requiring essential skills, even if the economy slows. For businesses, working with skilled recruiters to adapt their offer to this market is essential.
Key Indicators (REC)
• 3.6% in May-Jul 2022, down by 0.2% from the previous quarter, and 0.4% since before the pandemic (ONS)
• 4.0% in Q4 of 2022 (Office for Budget Responsibility)
• Unemployment is expected to rise to 5.0% by 2025 (BoE)
• There were 1,266,000 vacancies from Jun-Aug 2022; a decrease of 34,000 from the previous quarter and the largest quarterly fall since Jun-Aug 2020.
Employer confidence continues to drop amid wider economic uncertainty
According to the latest JobsOutlook survey, business confidence in the UK economy fell by a further 9% from the previous rolling quarter to net. Employers’ confidence in making hiring and investment decisions also fell by 7% to the lowest figure on record since data collection began at the start of 2022. The REC’s Labour Market Tracker revealed the number of active job adverts across the UK has been cooling off since the end of July. In the week of 19-25 September, active job adverts hit a low of 1.45 million while new job adverts posted were at 143,000 – similar to levels seen in April 2022.
None of us are passive in this crisis – individual business choices and government interventions impact on what we will see in the future. Controlling inflation and clear growth plans are essential components of making sure the UK is resilient to economic uncertainty. But both rely on our new Prime Minister and her team working with businesses to address shortages across our labour market. There is a lot that she needs to address but in the meantime, let’s focus on what we can do.
What we need to do together
1. Develop long-term workforce planning
2. Highlight good recruitment, diversity and inclusion
3. Raise awareness about future skills needs
I invite you to download a report I have written highlighting the 7 recruitment trends you should be aware of recruiting sales talent in this market.