Recruitment Outlook Report – September 2023

For those who have felt ripples of concern in the recruitment market because of the wider economic picture, the KPMG/REC’s latest Report on Jobs recruitment outlook paints an improving and cautiously optimistic picture. As Neil Carberry, REC Chief Executive, commented,

“Employers tell us they are feeling better about themselves as the year moves on, and today’s data does suggest the possibility of a turnaround in hiring over the next few months.”

Importantly, it looks as though temporary hiring is strong, and there are indications that the year-long slow-down in recruitment may be nearing an end, particularly in the private sector. Additionally, certain industries, such as engineering, remain particularly strong with high demand for new workers.

Let’s take a closer look at the most recent findings.

Glimmers of hope in recruitment

The number of new permanent staff continues to decline, totalling a year of decline, but that decline is softening. However, there’s a renewed uptick in the use of temporary workers. This shows a typical picture, where employers in need of good talent but with wider concerns about the economy will turn to temps. This is a unified picture across the country. It takes some time for the impact of economic decisions to filter through to the jobs market. However, with the relative stability to interest rates, after the sharp period of growth, employers should begin to regain confidence in expansion and hiring.

Increases in starting pay continue but are easing

We’ve seen a sustained period of pay inflation. This continues, and pay inflation remains sharp, but notably the rate of expansion has dipped slightly to a two-and-a-half-year low. It’s a similar picture for temporary wages, with the slowest increase recorded for 31 months. There’s notable competition for both temporary and permanent workers so this continues to push pay upwards. In reality, companies must offer competitive pay to attract the best candidates, especially in the landscape of skills shortages. That said, budgetary pressure is subduing wage growth. It’s also worth noting that unprecedented pay growth in the public sector is pushing up the overall average.

Candidate availability continues to grow

Once again, employers will be pleased to learn of continued improvement to candidate availability. July saw particularly high increases in both temp and permanent candidate supply, but still the figures are improving overall. There have now been seven months where we have witnessed candidate supply growing. The increase in candidate supply is most notable in the North of England. Restructuring and economic slow-down are the driving forces.

Number of vacancies is falling

There remain a robust number of vacancies offering candidates good choice. However, the total number of vacancies has contracted in September. This signals the first fall in overall demand for new staff since February 2021. It’s worth noting that the contraction is only marginal. The ONS reports that the total number of vacancies is now 24% less than the post-pandemic record. However, to put this in context, the number of vacancies is still comfortably higher than just prior to the pandemic.

There are good opportunities in the current jobs market for employers and candidates alike. However, both sides may need to work harder to secure a good arrangement. That’s where recruitment support from experts is invaluable.

Let us work for you and demonstrate that while overall figures are important, it’s the individual relationship between employer and candidate that is paramount. Get in touch on 0161 359 3111.

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We publish an overview of the REC/KPMG Recruitment 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.

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Recruitment Outlook Report – Sept23

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