When reviewing the latest REC Report on Jobs, Neil Carberry, Chief Executive at REC, succinctly captures the current pulse of the labour market in London. He said, “In many ways, the labour market is marking time waiting for the brakes to be taken off growth by the Bank of England.” The prevailing sentiment suggests a cautious stance among businesses, awaiting cues from the Bank of England with interest rates to unlock growth. However, the UK jobs market is notably resilient, particularly due to our use of temporary jobs. That’s what we’re seeing – employers managing their hiring needs by turning to temps, likely until there’s greater stability in the New Year. Let’s review the latest market highlights:
Permanent staff hires: a softened decline
Anticipated in light of broader economic trends, we reveal thirteen consecutive months of reducing permanent hires. However, there is a noteworthy development—the rate of decline seen in the last month is the gentlest since June, showing that things are easing off. Despite cautious optimism, employers are still hiring, particularly using temps to meet needs.
Candidate supply: things continue to get better
After weathering a prolonged period of poor candidate supply, there is notable respite. Eight consecutive months have seen an upswing in candidate numbers. This shift is attributed to increased organisational restructuring and redundancies. Last month witnessed a sharp rise in candidate availability for both temporary and permanent roles, the most substantial growth since December 2020.
Pay trends: salary inflation is easing
Despite consistent salary inflation, the trend has eased to a 31-month low. Permanent salaries and temporary wages continue to rise, albeit at a less intense pace. The competitive nature of talent acquisition persists, especially as employers navigate the challenges posed by the ongoing cost of living crisis.
Delving into data from the Office for National Statistics (ONS) unveils sector-specific variations. While there is an overall +8.1% rise in employee earnings, this is higher because of some one-off payments by large public sector employers like the NHS.
Demand for staff: resilience and strength
Vacancy numbers have been quite stable, but there has been a slight dip in permanent staff vacancies and a modest rise in temporary vacancies. Businesses, in times of uncertainty, tend to turn to temporary staffing solutions for enhanced flexibility—a testament to the adaptive resilience of the UK labour market.
Digging deeper into the data reveals nuanced trends. The private sector, both in permanent and temporary roles, shows resilience and growth. Total vacancies remain 20% above pre-pandemic levels, with specific sectors like accounting and finance exhibiting sustained demand for permanent roles.
Resilience amidst challenges
While the recruitment landscape faces some challenges in the context of the wider economic landscape, it is crucial to acknowledge the resilience of the UK job market. The current scenario, though intricate, offers opportunities for candidates and employers alike. Navigating this landscape with the support of recruitment experts is paramount.
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The Team at Love Success