Entering the start of the year, the Q1 jobs market remains tight. The number of job seekers remains high while the demand softens. Starting salaries offered to new joiners are beginning to stabilise, with some recruiters indicating that clients are becoming more cautious amid budgetary pressures and the impending Spring Budget.
Here is our monthly deep dive into the recruitment activity from our recruiter colleagues across the UK.
The recruitment landscape – January 2024.
Vacancies.
Overall, recruiters reported that the number of open vacancies softened for the 4th time in 5 months. This was true across both the permanent and contract markets.
Within the perm market, the demand dropped for the 5th consecutive month, and although temporary vacancies expanded, the rate was marginal and the slowest experienced since November 2020.
Public vs. private sectors.
When looking at the number of vacancies in each studied sector, recruiters reported a tale of 2 halves. Numbers of vacancies were reported to have increased in the private sector while taking a drop in the public sector.
The strongest increase in demand was for contract workers in the private sector, while the quickest decline was for perm roles in the public sector.
These numbers were supported by the ONS. Its data revealed that vacancies continued to decline to the lowest levels we’ve experienced in nearly 2.5 years. The number of open roles fell by 49,000 in the 3 months to December ’23, landing at 934,000.
Vacancies by sector.
On average the demand for permanent and temporary staff fell across 60% of the monitored categories. The steepest rates of contraction were seen in retail, construction and IT and Computing across both markets.
Demand for skills.
The demand for skills within the IT and Computing sector was similar across both permanent and contract markets.
Recruiters have reported an abundance of requirements for:
- Automation testers
- Cybersecurity professionals
- Data professionals (particularly data scientists and data engineers)
- Developers (particularly front-end developers)
- IT system administrators
- ML engineers
- Service desk Engineers.
- Software architects
Once again, we would add that we have seen a rise in the requirement of senior-level tech professionals. This includes IT directors and Senior or leadership roles across all departments.
Placements.
Permanent placements.
The start of Q1 witnessed a drop in the number of placed permanent candidates. Broadly, this has been the case since the start of October 2022. However, the latest drop was more marked. January’s rate of contraction was sharp, and above the average seen over this period of decline.
The steepest rate of contraction was experienced by recruiters in the Midlands, although this was a theme echoed elsewhere across all 4 monitored regions of England.
Temporary billings.
January witnessed a decline in temporary billings for the 3rd consecutive month. The pace of reduction was the softest seen however and marginal overall. There was a spit across the nation though. Higher temp billings were seen in the north and the south, while declines were felt in London and the Midlands.
Anecdotal reports from agencies attributed these drops to slower and paused hiring decisions as well as an overall lower number of job opportunities.
Candidate availability.
Across January, recruiters reported that candidate numbers have risen once again. This takes the latest period of candidate availability growth to 11 months.
Despite an overall upturn, agencies registered a softer rise in the number of permanent candidates across January. It was also the least pronounced in the last 4 months.
Within the contract sector, there was a sustained rise in candidate numbers and while marked, the rate of growth was the softest seen since May 2023.
Once again, the reasons behind the growth were thought to be because of redundancies, worker layoffs and a general subdued demand for workers.
Pay and salary.
Permanent.
Once again, the average starting salary paid to permanent workers rose across the UK. Whilst still sharp, the rate of growth slipped to the softest we’ve seen since March 2021.
The higher cost of living and the competition for skilled workers has put pressure on starting salaries while concurrent reports of tighter client budgets can explain the more stable salary trends over the close of 2023 and the start of 2024.
Contract rates.
Higher costs of living and the competition for skills have been driving up temporary staff hourly rates for the last 34 months, and January was no different.
January’s increase was solid and the quickest rise we have seen for 5 months. That being said, the rate of growth was steadier than the average over the latest period of rising hourly rates.
This was true over all 4 regions of England and was led by the South.
Interested in recruitment trends?
Are you interested in UK recruitment? You can read through all the latest events and trends within the UK recruitment sector over on our blog.