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  • Writer's pictureDan Malkoun

Recruitment Activity Continues to Rise Sharply

Updated: Aug 3, 2023

Recruitment Activity Continues to Rise Sharply in 2022 Along With Starting Salaries . The jobs market has been on a steep rise since covid restrictions were first lifted in April 2021. Since then, there has been no let-up in the demand for workers which is continuing into 2022. But while vacancies increase, the number of candidates has been in a steady decline, pushing starting salaries up and this pattern seems set to continue in 2022.

Staff Appointments The seasonally adjusted Permanent Placements Index remained comfortably above the neutral 50.0 level in January, signalling an eleventh consecutive monthly rise in Recruitment Activity and permanent staff appointments across the UK. The steepest increase in permanent staff appointments was seen in the South of England with London sitting at 67.3 on the Index. Similarly, short-term/contract staff billings also saw an increase which has been consistent in each of the past 18 months. Vacancies January saw an increase in Recruitment Activity and overall vacancies for the twelfth successive month and even though the number of vacancies is well above the series average, the rate of expansion eased for the sixth month in a row and was the slowest seen since April 2021. The growth of demand for permanent workers dropped slightly, while temp vacancy growth quickened for the first time since July 2021. The quickest increase in vacancies was signalled for permanent roles in the private sector but demand for staff continued to rise sharply across the public sector during January. Data from the ONS showed a further increase in job vacancies across the UK in the final three months of 2021 at 1,247,000, up from 1,214,000 in the preceding quarter. Interestingly, in 2020 prior to the pandemic, the number of vacancies stood at just a touch over 800,000.

Which Sectors Are Seeing the Most Demand for Candidates? IT is, as always, at the top of this data with Nursing/Medical/Care and Accounting/Financial running close behind. That said, all sectors apart from retail are seeing unprecedented demand for workers with little disparity between the sectors. All sectors are seeing demand that is way above that experienced pre covid and staff availability slipped further in January to 35.1.

Starting Salaries Starting salaries awarded to new permanent joiners increased again in January 2022 with higher starting salaries overwhelmingly linked to greater competition for scarce staff and ongoing skills shortages. Data from the ONS showed that employee earnings (including bonuses) rose +4.2% year-on-year in the three months to November. At this point in time, we are almost midway through the first quarter of 2022 and there is still widespread uncertainty around the UK economy. However, despite business confidence in the economy dropping, many employers are still intending to hire new staff and are confident in their ability to do so. Higher inflation and the rising cost of living will be the biggest impact on the labour market this year. Labour shortages have been a factor in this; as candidate availability declines, employers are offering record-high starting salaries in an attempt to stay competitive. The Bank of England has predicted that inflation will reach a peak of 6% in spring 2022, then start to decrease in the second half of the year and into 2023 where we might start to see an easing in the current recruitment situation and a return to a more normal pace of hiring.

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