It’s a time of change in the recruitment market which, as always, reflects the wider economy. Overall, the end of 2022 is characterised by a further tightening of the market, with high numbers of vacancies and issues with candidate supply. However, despite the wider economic concerns, UK unemployment remains at record lows and REC/KPMG’s JobsOutlook data shows that employer confidence in their hiring intentions actually rose 1% between August and October despite wider economic confidence dropping.
Let’s take a look at the latest findings from the REC’s Report on Jobs.
Permanent placements are now falling, temp numbers rise
November signalled the second month in a row when the number of people being placed in permanent jobs fell. We believe low candidate supply and economic caution sit behind this.
In October, we saw temporary numbers stagnate. These increased modestly overall in November, but still it was reduced compared to the previous trend, and indeed the North of England experienced declines. The increase in demand is to be expected. Employers turn to temporary workers to manage uncertainty while staying adequately staffed and it’s the season for temps!
Demand for staff continues to grow
It’s important to note that while the trends are changing, demand for staff continues to grow, albeit at the softest rate since February 2021. For the reasons given above, demand for temporary staff is expanding more sharply. Data from the Office for National Statistics (ONS) shows that the total number of vacancies fell by 46,000 in the three months to October, but these vacancy numbers are still historically very high.
Softest growth in starting salaries in 19 months
Encouragement to candidates moving jobs in the Cost of Living Crisis in the form of wage inflation is now starting to wane. There’s still notable inflation in wages but it’s the softest seen since April 2021 for starters and represents an 18-month low for temporary workers. Nonetheless, high rates of pay are still available for candidates because of candidate supply issues. Indeed, the ONS revealed that employee earnings were up 6% in the third quarter of 2022. The North of England, particularly, is experiencing increases in temporary wages.
Candidate supply remains problematic but decline slows
Candidate supply issues have characterised every Report on Jobs for many months now. However, the latest data suggests that while supply continues to deteriorate, and indeed at historically steep rates, the decline in November was the softest we’ve seen since April 2021. Various reasons continue to drive this including fewer foreign workers, a tight labour market and the prevailing economic uncertainty. There is some indication that redundancies softened the decline.
It’s an interesting time in the recruitment market and employers and candidates need to adjust and be aware of the wider market. Neil Carberry, Chief Executive of the REC, said:
“As the economic outlook weakens, we can expect to see falls from historic highs across our measures, but it is notable that pay and vacancies are still growing, although at a much lower rate.”
It is true that we can expect a more subdued time in recruitment terms due to the unfolding economic climate, however, demand remains solid and will remain so due to candidate and skills shortages. Recruitment planning is vital for businesses to survive and thrive over the next year, using the strategic support of experienced and dedicated recruiters.
We are here to help you manage the economic landscape ahead with first class recruitment. Get in touch on 0161 359 3111.
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