The REC’s latest JobsOutlook found that business confidence in the UK economy continues to grow, rising by 13% on the previous quarter. This feeds through to positive data revealed in the latest REC and KPMG Report on Jobs. The main headline worth our attention, and indicative that things may be getting slightly better for employers operating in a tight labour market, is that staff availability has grown for the first time in over 2 years. Overall, the data shows that while things remain hard to navigate, and so still require the hand of a skilled recruiter for both candidates and employers, it is far from the disheartening picture many anticipated for 2023.
Let’s take a look at the main findings.
Difficulties getting permanent staff eases and temps grow in popularity
While the data still shows that it’s difficult to fill permanent vacancies, it indicates that it’s getting less problematic. The North of England is leading the way here. It makes sense that employers are still a little wary about making long-term hiring decisions and, as such, they are turning to temporary workers to fill their gaps and remain productive. As such, temporary staff use has grown at the fastest rate since September 2022. This follows the standard pattern at times of wider economic uncertainty so is to be expected.
Candidate availability has risen for the first time in over 2 years
We know it’s been difficult for employers to find large and diverse pools of candidates. The excellent news, and an indicator that the vice-like tightness of the labour market is easing, is that candidate availability increased in March for the first time in 25 months. It’s likely that increased confidence amongst job seekers is pushing the change, but increased redundancies due to economic uncertainty will also play their part. The North of England reports the greatest improvement in candidate availability.
Pay continues to rise sharply
Starting salary inflation and the amount employers are paying temps continues to increase sharply. However, it’s worth noting that the pace of starting pay inflation is slowing down slightly, while remaining sharp. This is a result of skill shortages combined with cost-of-living pressures. Starting pay inflation is particularly intense in the North.
Demand for staff continues its upwards trend
Vacancy numbers continue to increase, although this is easing slightly. We’ve now seen consistent vacancy growth for 26 months. Employers recognise that onboarding the best talent is essential for weathering a difficult economic climate and thriving in future months.
The data this month reveals a slight, but welcome, change on the horizon. As Neil Carberry, REC Chief Executive said,
“The big news is that candidate availability is up for the first time in more than two years. This suggests that, while the market is still tight, it should be getting gradually easier for firms to hire over the next few months.”
This is excellent news for employers who’ve struggled to recruit the workers they need in a restrictive jobs market. The increased confidence witnessed in employers should continue to expand, and this will pair with better confidence amongst job seekers too.
As always, we’re here to help employers and candidates navigate the job market as it presents today. While the market remains tight, skilled recruiters are essential to match available candidate supply with employer opportunities.
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