Amid concerns in the recruitment market due to broader economic trends, the most recent Report on Jobs from the REC presents an increasingly positive and cautiously optimistic outlook. As aptly put by Neil Carberry, REC Chief Executive, “Employers tell us they are feeling better about themselves as the year progresses, and today's data does suggest the possibility of a turnaround in hiring over the next few months.”
Crucially, temporary staffing is showing strength, and there are indications that the year-long recruitment slowdown may be approaching its end, especially in the private sector. Certain skills are in higher demand, such as secretarial and clerical staff in the private sector. Let's delve deeper into the recent findings:
Optimism in recruitment
While the decline in new permanent hires persists, marking a year of contraction, the pace of decline is moderating. Simultaneously, there's a renewed move towards hiring temporary staff. This reflects a common pattern, where employers, desiring top talent but wary of economic uncertainties, turn to temps. This trend is consistent across the nation but with the quickest expansion recorded in London. It takes some time for the ramifications of economic decisions to permeate the job market. Nevertheless, with interest rates remaining relatively stable after a period of rapid growth, employers should gradually regain confidence in expansion and recruitment.
Wage growth continues but eases
The job market has witnessed sustained pay inflation, but the rate of increase has slightly slowed to a two-and-a-half-year low. Temporary wages also reflect a similar pattern, with the slowest growth in 31 months. Fierce competition for both temporary and permanent employees continues to push salaries higher. Companies must offer competitive packages to attract the best candidates, especially in the context of skill shortages, but nonetheless, budgetary constraints are restraining wage growth. Additionally, it's important to note that unprecedented pay growth in the public sector is elevating the overall average. London stood out a little here, as it was the only region in September to register a sharper rise in permanent pay compared to the previous month.
Growing candidate pool
Employers will be pleased to note the ongoing improvement in candidate availability. July saw particularly significant increases in both temporary and permanent candidate supply, and we’ve dipped a little since then. Overall, candidate supply has been on the rise for seven consecutive months. This is most likely due to redundancies and the wider economic market.
Vacancy numbers are robust but show a decline
While there are still a substantial number of vacancies, the total number has decreased in September. This marks the first drop in overall staff demand since February 2021. It's important to stress that this contraction is marginal. According to the ONS, the total number of vacancies is now 24% lower than the post-pandemic peak. Nonetheless, it's worth mentioning that the number of vacancies remains significantly higher than the period just before the pandemic.
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The Team at Love Success