We all know that the world has been tipped on its head recently by the Corona virus pandemic and we are now slowly adjusting to what will become our new normal. Whilst sadly, many people have lost their jobs as a result of the pandemic and companies put recruiting firmly on hold for the first three months of lock-down, the jobs market is now gradually beginning its recovery.
We have examined the latest UK Report on Jobs from KPMG and The Recruitment and Employment Confederation to bring you a breakdown of the current outlook for recruitment in the UK. Whilst the good news is that recruitment activity moved closer to stabilisation in July, with both permanent placements and temporary billings declining at much softer rates than in the prior four months, there are far fewer vacancies in the market than before March, and more people looking for jobs.
The Permanent Placements Index stood at 44.7 in July. Whilst this is still considered to be a decline in comparison to pre-Covid, it is the 5th consecutive rise since March 2020 where the lowest index rating reached just 5.3 in April.
Temp billings also saw a rise in July, returning almost to pre-Covid levels seen in February of 45.1
At 43.4 in July, the Total Vacancies Index rose from 31.2 in June but remained below the crucial no-change 50.0 threshold. Private sector vacancies declined at a slower rate than Public sector vacancies and across both sectors, temporary vacancies fared slightly better in comparison to permanent placements.
Sectors Most Affected by The Pandemic
Retail, Hospitality and Blue-Collar sectors have suffered the steepest decline in permanent placements. Engineering, construction, Accounting and Finance, Executive and Tech have fared slightly better although the numbers are still not at pre-Covid levels.
We saw a sharp and accelerated increase during July, remaining well above the neutral ‘50’, at 84.
Demand for Skills
There is still a high demand for certain skills across industry despite the global pandemic, and in fact, the pandemic has brought about a need for certain skills more so than ever. Accounting, IT and Computing and Executive Professionals in areas such as Digital Marketing and Project Management are still in high demand.
Weaker demand for staff, budget cuts, and a substantial increase in the supply of labour added downward pressure to starting salaries in July. Latest data from the Office for National Statistics showed that employee earnings (including bonuses) fell by -0.3% on an annual basis in the three months to May.
The Effects of Furlough
Although business confidence has been slowly rising as lock-down measures have eased, the recovery has a long way to go. The next three months will be critical to understand the true impact of the furlough scheme with the potential for more redundancies to come.
The Treasury has revealed that the cost of the Corona virus Job Retention Scheme (CJRS) has risen to £31.7 billion and a record 9.5 million staff remain on furlough with 1.2 million employers taking part in the scheme. Sectors retaining the highest number of employees still on furlough cover the arts, entertainment and recreation followed by accommodation and food services.
On reflecting on the content of this report, it does appear that the jobs market is improving, possibly quicker than was first anticipated. The economy is slowly beginning to recover with NatWest Regional PMI data for July showing increases in business activity across all nine English regions and Northern Ireland. The Bank of England is also reporting a sharper recovery than initially anticipated. However, the proof is in the pudding and we are not out of the woods yet. Hopefully, the Government’s plans for regional lock-downs as outbreaks occur, along with businesses embracing remote working, will see the recovery period continue with an upward trajectory.