Economic uncertainty is starting to impact recruitment data with the slowest increases in permanent placements for 17 months. Bear in mind this is on the back of unsustainable growth following the pandemic bounce back. As such, it’s not a bleak picture and the broadly positive trends we’ve seen continue, with good opportunities for candidates.
As Kate Shoesmith, Deputy CEO of the REC says,
“The jobs market remains solid.”
We know that uncertainty can make things difficult for businesses and also for candidates. While anticipating concerns on the horizon, it’s important to note that the latest data, both from the REC’s Report on Jobs and the Office for National Statistics (ONS) are positive, showing now is a great time to look for work with high vacancy numbers and high starting salaries. While employers are struggling with skills shortages, there is support for them from leading recruiters.
Let’s take a look at the recent state of play in the recruitment market:
1. Recruitment activity has softened but is still increasing
It’s important to turn a careful eye to current data. This reveals that there have been slower increases in both permanent staff appointments and temporary roles. Indeed, these signal the softest rate of expansion in 17 months. However, expansion is still the key word. Things are growing, just a little more cautiously. The rate of growth was never sustainable, so this makes sense. The increases in staff placements are still solid. It is however, constrained by candidate shortages.
The North of England has particularly seen softer growth in the number of permanent staff appointments in July.
2. Vacancy growth is slowing
With record high numbers of vacancies, it’s actually an opportunity to breathe a sigh of relief that the increase in demand for staff is not quite as high as it has been. Vacancy numbers are still growing, but not quite at the unrelenting pace we had seen. This applies to both permanent and temporary staff.
3. Candidate shortages are problematic
The number of candidates available to employers has been troublesome for quite some time, notably since March 2021. The availability of candidates continues to fall but there’s some hope that the rate of decline in candidate numbers is easing slightly. We’ve now seen the slowest rate of decline in 15 months. Skills shortages, reductions in foreign workers and growing uncertainty about changing roles are all likely playing their part.
4. Starting pay is high but is easing slightly
With such marked candidate shortages and high levels of vacancies, it’s understandable that starting pay inflation has been a notable characteristic of recent reports. While this has eased slightly, it’s still very marked. This applies for both permanent and temporary workers. As is often the case when insecurity reigns, there’s high demand for temps and so this is ensuring buoyant data in the Temporary jobs Index. The ONS shows that employee earnings increased +6.2% to May 2022, some of the steepest increases in pay recorded.
As is a current trend for both candidates and employers, the best solution for navigating the current tight market is to turn to reliable and proven recruiters in your sector. With the right strategic help, matching candidates to roles and employers is possible, allowing business growth despite the economic uncertainty.
Many apologies for the delayed Recruitment Outlook Report for July 2022. It’s a busy time of year with holidays! However, it’s still worth looking at the latest data, as it signals a small but notable shift in the state of play. This gradual change will be played out further in future months.
Read the full article to learn more about:
- Softening recruitment activity
Recruitment activity has eased slightly, from its rapid pace, but activity is still increasing overall.
- Slowing down vacancy growth
We’ve been dealing with record levels of vacancies. They continue to grow but not as extremely.
- Why candidate shortages remain difficult
But there is hope with the slowest rate of decline for 15 months.
- High levels of starting pay but why it’s easing
Starting pay has been increasing for all workers, but this inflation is now easing a little.
The current climate is becoming marked by insecurity in the economy. At such times, relying on successful recruitment agencies is key to maintaining growth and security within the business.