It’s been another month where we continue to see robust recovery in the world of work. Whilst Omicron and associated concerns around that may add to uncertainty over the next few months, at the moment we are proving a resilience that’s enabling a very tight and strong labour market.
There’s a LOT of hiring going on
There remains very high demand for workers. Permanent placements grew at a sharper rate than we saw last month, and indeed permanent roles are outpacing temporary positions. This is the ninth month running that permanent staff placements have gone up. Given that many employers are struggling to fill positions due to candidate shortages, this is quite remarkable data. The picture is consistent across the country.
Vacancy growth eased but it’s still strong
We’re continuing to see strong demand for new staff. Rates are slightly softer than we have been witnessing recently, but they are definitely still notable with the total vacancies recorded rising for the tenth month in a row during November, according to the latest Report on Jobs from the REC.
The majority of this demand is within the private sector, most particularly within IT and Computing. As would be expected at this time of year, even without the effects of the pandemic, there are also notably large numbers of vacancies in Hotel and Catering.
Where are the candidates?
There’s been a great deal of talk about candidate shortages and that will continue for some time yet. However, slightly good news for employers is that the downturn in candidate availability was actually at the weakest rate yet since May. Let’s be realistic though – we can’t hide the fact that candidate shortages are still very much a problem. The demand may be slowing, but it’s still hurtling along like a bullet train. Nearly half of all recruitment agencies (49%) still recorded a lower availability of staff in November. Uncertainty caused by the pandemic and Brexit are still being held to blame.
More money for new starters
It remains no surprise that starting salaries are continuing to increase for both permanent and temporary new starters. Indeed, the rate of salary increase for permanent staff is again breaking records. The ONS revealed that employee earnings (including bonuses) rose +5.8% on an annual basis in the three months up to September. This isn’t as high as it was earlier in the year, but it’s still impressive.
A strong end to the year
December and January are always interesting times in the jobs market. Employers deal with seasonal differentiation and candidates use the New Year for a change. It will be particularly interesting watching the movement amongst employees in the first quarter of 2022 as we combine seasonal trends with the current economic and jobs environment.
Claire Warnes, Head of Education, Skills and Productivity at KPMG UK welcomed the strength of the bounce back over the last 10 months, but went on to say,
“The current trajectory is unsustainable in the long run for businesses and the wider economic recovery.”
Employers will need to work hard in 2022 to nurture and develop the talent they’ve got, retain it, and strategically source the talent they need.