REC Jobs Outlook for January 2021

Before we get into the ins and outs of what the jobs market looked like in January, can we just take a moment to reflect on the past 12 months? In January 2020, we were all making resolutions and feeling optimistic with a ‘new year new you’ attitude. By March 2020, we were plunged into a world we didn’t know and life, it would seem, was being put on hold. During Lockdown One we listened to endless predictions about Covid, the economy and our jobs. If we are being honest, none of those predictions have panned out like anyone expected.

Which brings us nicely to the jobs outlook reports that we have been following closely from the REC and KPMG. Whilst there is no denying that we have seen job losses across the board, we need to be mindful that the majority of UK businesses have adapted well to working in the ‘new normal’. From a jobs perspective, we are not far off from where we were at the beginning of 2020.

What has Amdas noticed about the Jobs market?

This calls for the need to be open and honest about what we have seen. There is no denying that there is a slowing in the number of vacancies that are currently open. The boost in job availability stems from sectors where there has been growth; tech, digital and IT being one of those areas. The pandemic has forced many businesses to adapt to a more virtual mode which has seen a rising need for these skills.

Despite a slowing down in employment across the board, the jobs market has been surprisingly buoyant considering the worse case scenarios we were presented with back in 2020. What we need to consider when we look at the jobs outlook is that a decline in available jobs does not mean businesses are not hiring because of their economic outlook. Employees are being offered opportunities for growth and progression with their current employers. Additionally, employees are, for now, staying put rather than looking to make a move. During periods of economic uncertainty, it is common for employees to stick with what they know rather than take the plunge and move on. That is not to say that there are not active candidates who are looking for a new position. It is more that the migration between jobs has slowed.

What happened with Available Jobs in January?

After a fairly buoyant end to 2020, there has been a slight downturn over the past month in the available vacancies. Permanent vacancies dropped from 51.1 in December to 43.8 in January and temporary vacancies have remained fairly static.

As expected, the demand for tech and digital skills is still high alongside construction, nursing and medical care. The hospitality and travel industries are being hit the hardest across both permanent and temporary vacancies which is understandable considering where we are in the pandemic.

The rate of available candidates has continued to grow through January although it should be noted that this growth rate has softened when looking at the current ten-month sequence of expansion.

When looking at pay, a decline in available vacancies usually goes hand in hand with a decline in starting salaries. This weakening was reflected in January figures as demand for new recruits fell. The economic law of supply and demand (fewer jobs and more candidates) has been consistent throughout the pandemic, with wages falling in line with the roles that are available.

What Does the Future Look Like?

Whilst the outlook for 2021 has not got off to the best of starts, the rapid rollout of the vaccine is shining a light of hope on businesses. We also have the Budget to come next month and there has been additional help from the government for businesses.  Small firms are being allowed more time to repay state-backed loans taken out to help survive the coronavirus lockdown.

Neil Carberry, CEO of The REC has said it’s likely that a path out of the pandemic is emerging. As that happens, we expect a strong recovery in permanent hiring. But businesses need Government help to bridge these last few months. Support for strained corporate cash flows is key. Extending furlough and reducing its cost to firms, supporting family business directors left out of support packages, and putting back repayments of deferred VAT and CBILs loans until the recovery would all help enormously.”