While the broader economic outlook remains uncertain, the latest data from the REC’s Report on Jobs reveals that the jobs market remains impressively resilient. There’s no avoiding that the recruitment market remains tight, but we’re experiencing glimmers of hope with increased candidate availability, while keeping unemployment low.
Here are the headlines:
More temps, fewer permanent staff
When businesses weather uncertain economic times, it’s a classic move to turn to temporary workers over permanent staff. The latest data reveals this pattern very clearly. Employers are opting to use temps over permanent candidates. This means that the number of people being placed in permanent jobs fell for the seventh month in a row, and indeed the rate of decline fell at the sharpest rate since early 2021. However, it’s an opposite picture for temporary jobs which continue to gain ground, with the rate of growth being the fastest for seven months. There has been continued growth in temporary jobs for 33 consecutive months now.
Candidate supply headaches are easing
We’re far from the stage of saying candidate supply issues are gone. However, the supply of candidates has now improved for two months and it looks like it’s quickening slightly, after steep falls for over two years. As Claire Warnes, Partner, Skills and Productivity at KPMG UK, said, “For businesses looking to hire, there are some green shoots in candidate availability, as supply improved for the second month in a row.”
It’s true that some of this candidate supply is coming from increased numbers of redundancies. However, some is coming from greater movement amongst candidates who want to find better paid roles in the current economic climate. This combines with employers turning to temps over permanent jobs. Nonetheless, there’s still growth in temporary candidate supply too, albeit marginal.
Starting pay continues upwards
Starting salaries for those in permanent jobs are still rising at historically sharp levels, now hitting a four-month high. It’s a similar picture for temps. There’s competition for great candidates and the cost of living situation are both primary drivers of starting salary inflation. It’s a similar picture across the country, but starting salary inflation for both permanent and temporary candidates is particularly fast in the North of England.
Vacancies continue to grow, but it’s softening
The number of vacancies being advertised continues to grow but it is at a three-month low. This is expected as employers increasingly turn to temporary workers. The Office for National Statistics (ONS) puts the current total number of vacancies at 1,105,000. While this is the lowest figure since the three months to August 2021, it’s still 33.8% higher than just before the pandemic. It’s worth noting that the engineering sector is leading the way in terms of numbers of permanent vacancies, and is third for temporary roles.
Successful businesses rely on the best talent
As Neil Carberry, REC Chief Executive, summarised,
Those businesses that succeed will have good, long-term strategies for accessing talent from a wide range of sources, including retraining. Recruiters are well-placed to help with this.
The economic climate and the continued tight labour market make it a time when employers particularly need support. We are here to support employers so that their organisations can thrive, no matter the wider economic picture. We can help you strategize and make gains through profitable recruitment.
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