Take a look at this valuable insights into current trends affecting the labour market, highlighting challenges and opportunities that lie ahead for employers and candidates. The reality is that the picture is one of most companies holding fast while they wait for inflation to come down further and interest rates to be cut. However, confidence is relatively high, and businesses are optimistic that growth will begin again in earnest soon.
Here we take a look at the latest data so that you can make informed decisions.
Businesses are steady and robust, biding their time
The report indicates a continued decline in recruitment activity for March 2024, marking a year-and-a-half of downturn. This is attributed to an uncertain economic outlook and ongoing recruitment freezes, with budget constraints notably impacting the numbers being placed into temporary jobs, which fell steeply since July 2020.
However, despite the challenging environment, the recruitment market is characterised by its ability to remain steady in turbulent waters. Fundamentally, businesses and candidates trust that this is a temporary lull. Additionally, there are nuanced regional and sector differences, with some areas experiencing sharper contractions in the numbers of candidates being placed in jobs. The engineering sector, and the North, are faring considerably better than elsewhere in the country.
Starting salary inflation is easing, a welcome situation for companies
While starting pay for both permanent and temporary workers continued to rise, the rate of increase is slowing down. March saw the weakest rate of salary increases for permanent staff in over three years, and for temporary workers, the slowest in four months. Employers have faced tough decisions with pay inflation, so this is a positive trend to enable renewed recruitment decisions.
Candidate availability is growing
There has been a rapid increase in candidate availability, the steepest in four months, driven by higher volumes of redundancies and cost-cutting measures at firms. Nonetheless, it’s important to note that UK unemployment is still relatively low at 3.9%.
It’s a diverse picture, we need to look at regions and sectors
For us, the sector-specific insights from the report are particularly relevant. Engineering remains a sector with high demand, contrasting with the overall decline in demand for workers across other sectors. Similarly, the North of England has a more buoyant recruitment market than in the South.
The report reflects broader economic trends impacting the recruitment sector, including persistent economic uncertainty and the anticipation of interest rate drops from the Bank of England, as well as the General Election.
As we look ahead, the insights in the latest data from the Report on Jobs offers a roadmap for navigating the complexities of the current recruitment landscape. Despite the challenges posed by economic uncertainty, a strategic approach to recruitment, emphasising sector-specific expertise and proactive workforce planning, will be key to thriving in the coming months.
By staying informed and adaptable, leveraging insights such as those above, we are well-positioned to support you with your recruitment and growth ambitions.
The data reveals an important bigger picture, but what really matters are the unique needs of your organisation so that it can thrive through talent, despite uncertainty. We are here to help you navigate it all.
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We publish an overview of the REC/KPMG Jobs Outlook Report each month to keep you up to date with the UK recruitment and jobs market month by month.
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