A Slow Start To 2023 - The Latest UK Report On Jobs
The first report of the year isn’t all great news, but it’s nothing we didn’t see coming. If you’ve had a look at the latest KPMG and REC report, you’ll know they’ve cautioned that the market is slowing down. If you haven’t read it yet, worry not! Here are some of the key takeaways from it 👇
At a glance, permanent placements are declining while temp billings continue to expand (but not by much). There’s also a softer rise in job vacancies, as staff supply declines at a weaker rate.
Permanent placements decline
This is for a third month running, but why? Although they adjusted for the normal seasonal drought near Christmas, the fall last month was the steepest since January 2021. Something tells us that the increased economic uncertainty, cost of living crisis, low candidate supply and pressure on clients’ budgets all had something to do with the latest drop 🤔
Neil Carberry, Chief Exec of the REC, assures “slowdown in permanent placements is not unusual in December”, but also that this time it is part of a wider softening trend in the permanent market.
Temporary billings grow but remain modest
Temporary billings had the biggest rise in the south of England, and demand for staff remained stronger in the private sector than the public sector. The steepest increase in staff demand was for temporary workers in the private sector, the report found. This includes retail, hotel/catering and nursing/medical/care.
Overall vacancy growth at a 22-month low
The overall rate of vacancy growth has weakened for the ninth consecutive month and was the slowest seen since the current period of recovery began in February 2021. However, agencies reported a sustained rise in demand for staff in December. Hopefully, this will be a sign of better things to come 🤞
The impact on the candidate supply
Uncertainty has also dampened candidate availability as more people become cautious about seeking out new roles in the current climate. The cost of living crisis has created a sense of anxiety where candidates are hesitant to leave a stable job, even if a new one pays better. We’re hoping that this “better safe than sorry” mentality will change as we become used to the current way of living. Seeking great candidates is difficult for recruiters at the best of times, never mind now.
Starting pay increases at a slower, but strong rate
Pay pressure on employers continued to soften in December, but inflation meant wage rates remained strong in the context of historical data. Rates of both permanent and temporary pay growth were their lowest since April 2021. Where salary hikes were reported, this tended to be linked to competition for candidates or the rising cost of living.
Claire Warnes, Partner of Skills and Productivity at KPMG UK, says that the job market is looking “less rosy” at the start of 2023, but that shouldn’t put us off. “Employers who hold their nerve and continue to invest in skills, in particular, are likely to benefit most when the economic upturn comes”. That day will arrive, so although the future is uncertain, we can only do our best for now 🙌
If you want to chat with us about how video can help you in the current unpredictable market, or for a copy of the full report, get in touch today!