According to the REC’s Labour Market Tracker, there was a 24.5% increase in new job advertisements in the first week of January 2023, with 184,335 adverts compared to 148,032 in the same period of the previous year. Additionally, the number of active job postings rose to 1.53 million, demonstrating that demand for workers hasn’t slowed down. Although some businesses may be hesitant to hire, the persistent labour shortages in the market indicate that many firms still have a need to bring on new employees.
Let’s take a further look at the latest information from the latest REC’s Report on Jobs.
Permanent placements fall for the fourth month in a row
The beginning of 2023 saw a decline in permanent staffing appointments, which has been continuing for the past four months, albeit at a slower pace. Companies seem to be cautious due to the uncertain economic outlook and are reluctant to make new permanent hires. As a result, firms are increasingly relying on temporary workers to fill job vacancies. Although the growth of temp numbers was mild, it was the fastest since September of the previous year.
As always in uncertainty, businesses are turning to temporary staff
In January, UK recruitment agencies reported a continued increase in revenue from the placement of temporary workers, extending the current period of growth to two and a half years. The rise in temp numbers was mainly due to the preference for short-term staff and the need to fill vacancies, as permanent workers were in short supply. The steepest increases in temp numbers were observed in the North of England and London.
Small increase in the growth in demand for staff
During January, there was an increase in demand for employees, with job vacancies growing at the fastest pace in three months. The demand for temporary workers rose at a faster rate compared to permanent staff. After adjusting for seasonal variations, the Total Vacancies Index showed a sustained rise in demand for workers. Notably, the growth rate of job vacancies improved for the first time in nine months and was steady overall. However, the increase still remained weaker compared to the long-term trend of the series.
According to the Office of National Statistics (ONS), the total number of available job openings was 1,161,000, which represents a decrease of 75,000 compared to the three months ending in September. Despite this decrease, the number of job openings is still over 40% higher than the pre-pandemic levels.
Starting pay inflation remains elevated
In January, starting salaries continued to rise significantly. The rate of inflation had slowed down from its all-time high in March 2022, but it was still the slowest in 21 months. The rate of pay inflation for temporary workers accelerated to a four-month high at the beginning of the year. Recruiters attributed the increase in starting pay to a shortage of candidates, as well as the rising cost of living putting upward pressure on salaries and wages. The North of England saw the fastest increase in permanent pay.
Overall candidate numbers fall at softer, but solid rate
In January, the rate at which the supply of permanent candidates declined slowed down, just as it has in each of the past seven months. Although still solid, the latest decrease was the mildest seen since March 2021 and much slower than the average for the entire year of 2022. Recruiters attributed the decrease in the number of candidates to a more cautious attitude among workers, who are concerned about job security and the cost of living, as well as the uncertain economic outlook.
We are safe, reliable, consistent, and ethical, so when you need to recruit or want to know what opportunities are out there, the best approach is to partner with us for successful recruitment solutions. Get in touch on 0161 359 3111.
#REC #KPMG #JobsOutlook #Recruitment #ExecutiveRecruitment #UKMfg #UKManufacturing #BusinessLeaders
We publish an overview of the REC/KPMG Jobs Outlook Report each month to keep you up to date with the UK recruitment and jobs market month by month.
Contact us today if you need specialist support to secure your future senior level workforce in Engineering/Manufacturing.
Follow us on LinkedIn, Twitter and Facebook for regular articles, reports, videos, guidance and support relating to recruitment for businesses and individuals.