Is This the Beginning of the End of the Pandemic for UK Jobs?
Each month we report on the jobs outlook for the UK and, as you can imagine, things have been quite turbulent for the past 12 months. But finally, it looks like the end to mass uncertainty is in sight as the data for March is very encouraging.
In March, the UK job market began to see a rebound off the back of the Government’s plan to ease national lockdown measures over the coming months. The highest rise in permanent placements in six years was seen in March coupled with a sharp increase in temporary billings. Whilst this is good news for businesses, job seekers and the UK economy, employers are still seeing a big skills gap across sectors including IT, construction and retail, with demand and supply not matching up.
Most notable is the start of the long-awaited recovery in hiring in London. This is a sure sign that business confidence is starting to flow back, but, as companies begin their recruitment drives, they will need to recognise the challenges the labour market is suffering due to a shortage of skilled staff.
Permanent and Temporary Placements in March
The number of permanent staff appointments across the UK rose from 47.1 in February to 59.2 in March, the highest increase recorded since April 2015. The biggest increases were seen in London and the South with permanent placements rising from 45.0 in February to 58.9 in March in London and from 44.3 in February to 60.9 in March in the South. The Midlands too is faring well with the highest number of placements UK wide, but growth in this region has been relatively steady throughout 2021.
Temporary placements have been rising steadily throughout the pandemic as companies look to contractors and temps to plug short term gaps in their businesses. In March, temporary billings stood at 59.6 jumping 8 points since February, an expansion that was the quickest seen since November 2017 and stronger than the series average.
Not only are placements increasing exponentially, so too are available jobs. In March we saw a rise in both permanent and temporary jobs UK wide to 61.3 and 61.4 respectively, the steepest increase in overall vacancies since August 2018. The private sector is faring better than public sector with these vacancies seeing their sharpest growth rate for 32 months.
Which skills are in Demand?
Throughout the pandemic, IT, engineering, construction and medical have dominated the skills shortage categories, and as of March, not much has changed here. But, and most notably, we are now seeing high demand for finance/accounting candidates and professional executive hires, both of which are currently topping engineering and construction skills.
What About the Availability of Candidates?
Well herein lies the crux of the problem, whilst demand for candidates is rising, the number of available candidates is falling. After rising sharply for most of the past year, permanent candidate supply was broadly unchanged for the second month running. While redundancies due to the pandemic and lockdown had driven up candidate numbers, this has been largely offset by people becoming more reluctant to seek new roles until the pandemic situation and economic conditions improve.
How Are Salaries Being Affected?
The good news for candidates is that the latest data signalled a renewed rise in starting salaries for people placed into permanent roles during March, with London recording the steepest rate of increase.
Although we are still at a tentative point in easing lockdown and the vaccination role out, there is good reason to be optimistic as employers’ confidence to make new hires and invest in their business rose to net: +13 in the last quarter. The REC’s latest Jobs Recovery Tracker saw 146,000 new job adverts being posted in the third week of March, coming on the back of a further 179,000 in the previous week. These numbers represent the two highest weekly figures since March 2020, the start of the Covid-19 pandemic.