As we near the halfway mark for the year, the overriding story of the 2022 jobs market is that it is tight. All data from the latest REC Report on Jobs underlines the same key headlines we’ve seen for months now. Against a backdrop of inflation rising 6.2% in the year to March 2022, different times ahead are facing us, with a return to uncertainty. However, our confidence is still robust, and for many it is a great time to change jobs.
Let’s take a look at the main findings.
Permanent placement growth sharp but slowing
Permanent job placements have been booming for the last year, and April’s data shows that the growth is still sharp. However, the growth rate is now at a 13-month low, likely characterised by difficulties actually finding candidates for roles.
Employers remain confident with their hiring plans and want to build and grow, so the demand is high. However, they can only recruit at the rate of available candidates.
Vacancies continue to rise sharply
Whilst the jobs filled are notable, there’s no letting up as the total number of vacancies continue to rise sharply. The rate of growth has eased slightly, but especially for permanent roles, we cannot ignore that the demand for workers is high. In real terms, the Office of National Statistics (ONS) reveals that in the first quarter of the year there were 1,288,000 positions being advertised which is, yet again, record breaking. This is more than double what we saw a year previously, and even 56.8% higher than the number of vacancies seen prior to the pandemic’s outbreak.
It’s worth noting that the Engineering sector is edging its way up the leadership board in terms of the types of jobs most in demand. In the permanent sector, Engineering is currently only second to Hotel & Catering.
Rapid, but slower, reduction in candidate availability
The above point leads onto the continued picture of candidate shortages. April signalled the fifteenth successive month in a row with drops in candidate availability. Unemployment is low (currently at 3.8% and only 0.4 percentage point off the lowest levels ever recorded way back in 1973) and there simply aren’t the numbers of candidates needed to meet employer demand. However, there is a glimpse of easing, with figures being the softest we’ve seen over the last three months.
Candidate shortages apply to both permanent and temporary jobs, but it is definitely more marked with permanent positions.
There is much debate about candidate shortages and why, but it is likely to be due to combined factors including geopolitical uncertainty, shortage of foreign workers and the overall tight market conditions.
However, as Neil Carberry, Chief Executive of the REC says, now is actually a great time for candidates:
“The labour market has been tightening for months on end, driving near-record growth in starting salaries for new staff. With vacancy numbers also historically high, this is a great time to be looking for a job – and a pay rise to help meet the cost rising cost of living.”
Starting pay is booming
It’s also a great time for candidates because starting salaries are rising and the latest data reveals substantial increases in starting pay for both permanent and temporary workers. There’s been a slight dip since March, but it’s still high.
This is matched with data from the Office of National Statistics (ONS) which has revealed that employee earnings (including bonuses) increased +5.4% on an annual basis in the three months up to February.
Watch this space
With another recent rise in the Bank of England interest rate (with likely more to come), combined with inflation pushing upwards apace, it’s likely that the landscape of the jobs market will be worth watching over the coming months.