2023 May Recruitment Outlook: Temps Bring Stability

Thursday, July 13, 2023

In a world of uncertain economic outlook, there is encouraging news in the wider jobs market. The latest data from the REC's Report on Jobs reveals that the jobs market is displaying impressive resilience. While the recruitment market remains tight, we are witnessing chinks of hope with increased candidate availability, especially in London, and low unemployment rates.  Let's dive into the key data points shaping the current job landscape:

Employers turn to temps for stability

During times of economic uncertainty, businesses often turn to temporary workers as a strategic failsafe. Recent data clearly demonstrates this trend is becoming prevalent once again, as employers are opting for temps over permanent candidates. London is leading the way in this regard. Consequently, the number of placements in permanent roles has declined for the seventh consecutive month, with the sharpest rate of decline since early 2021. On the other hand, temporary jobs are gaining ground at an accelerated pace, experiencing the fastest rate of growth in seven months. This growth streak in temporary jobs has continued for an impressive 33 consecutive months and is speeding up.

Candidate supply worries start to ease

While we are not yet out of the woods in terms of candidate supply challenges, there has been a notable improvement for two consecutive months. The rate of improvement appears to be slightly quickening after steep falls over the past two years.

As Claire Warnes, Partner, Skills and Productivity at KPMG UK, stated, "For businesses looking to hire, there are some green shoots in candidate availability, as supply improved for the second month in a row."

Starting pay continues to increase

Starting salaries for both permanent and temporary roles are rising at historically sharp levels, reaching a four-month high. The competition for exceptional candidates and the cost of living situation are the primary drivers of starting salary inflation.

Vacancies numbers are high, but growth in vacancies is slowing

While the number of vacancies being advertised continues to grow, it has reached a three-month low. This decline is expected as employers increasingly turn to temporary workers. The Office for National Statistics (ONS) reports the current total number of vacancies at 1,105,000. Although this figure represents the lowest since the three months leading up to August 2021, it remains 33.8% higher than pre-pandemic levels.

Businesses can access the best talent to thrive

In the words of Neil Carberry, REC Chief Executive, "Those businesses that succeed will have good, long-term strategies for accessing talent from a wide range of sources, including retraining. Recruiters are well-placed to help with this."

Love Success is committed to supporting employers in navigating the current economic climate and the tight labour market. We provide strategic guidance and profitable recruitment solutions to ensure your organisation thrives, irrespective of the wider economic landscape.  The road ahead may present challenges, but we can help you to locate exceptional office talent and drive your business towards success.

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