Unpicking the recruitment data.
Our thoughts.
As we come out the other side of the Covid 19 pandemic, the hiring journey remains complex for recruitment professionals and hiring teams.
Data from KPMG and the REC offers, what on the surface, appears to be positive news. However, these highlights seem to be driven by uncertainty and appear to suggest a country-wide shortage of talent across many sectors.
Of course, technology and digital have managed to come out of Covid somewhat unscathed. The nature of the industry means that IT, tech, and digital professionals have the ability and infrastructure to work remotely without too much disruption. While technology companies were able to pivot their offering, readily adapting to the changes in consumer habits and product demand.
So what does September’s data tell us, and does it support what we have experienced here at Ignite HQ?
The Lowdown.
An increase in hiring activity.
The data suggests that there has been a steep rise in hiring activity over September, largely because of improved market confidence. Covid 19 is beginning to get smaller in the rearview mirror, and we are starting to get a better picture of how Brexit will affect the business landscape. This hiring increase has been particularly true of permanent placements.
Permanent hiring expanded at a similar rate to August 2021, which was documented as being the strongest over recent years. Temporary and contract placements were not as strong however but remain comfortable.
Ignite can support this finding, somewhat. Our permanent placement level is in line with the reported levels of success of our peers with many of our established clients releasing new roles and becoming less cautious regarding growing their teams. Also in support, our contract work remains steady, with many contracts being extended at this time. We have found that autumn is a time when contractors begin their search once more after family life gets a bit more BAU, the summer holiday season ends, and children return to school.
It will be interesting to see what happens over the next month, and if levels of contract growth pick up to the surge we experienced in the Spring.
An increase in starting salary.
The data reports that there has been a record, unprecedented increase in permanent starting salaries. This is an ongoing trend, one that has been on an upward trajectory over the last 3 months. The data also suggests that starting salary is an area that is becoming increasingly negotiable. Not only have the starting salaries increased, but so too has the number of candidates that have been able to successfully negotiate their way to a higher wage.
This is of course great news if you’re a candidate that has secured new work in the last few months, however looking more widely, it is indicative of a larger and more problematic issue. The shortage of skilled IT and tech workers is well documented, and we can attest to that here. Our team has a LinkedIn and industry network of highly talented candidates who we can reach out to, to discuss our opportunities. However, the number of candidates who are putting themselves forward on job boards, for example, has reduced over the duration of the pandemic.
Candidate availability.
Candidate availability throughout September improved slightly; a 2 point pick-up from August’s all-time low.
As we explored in the last point, it’s this candidate scarcity that is driving the salary-driven competition reported in the findings. The jump in recruitment activity has limited the pool; more nets are trying to catch the same fish.
Additionally, the change in the visa and sponsorship system implemented at the start of the year has greatly changed the possibilities for EU tech workers. While professionals with these skills are considered prospects on the points-based framework, the red tape bureaucratic hoops individuals and companies must jump through are a serious deterrent to EU tech job seekers and potential employers.
We have also spoken to many passive candidates who are incredibly qualified and well equipped to do the jobs we have been asked to fill by our clients. Pre Covid, we found that these conversations were more productive and resulted in more CV submissions. Covid has changed these discussions. Potential candidates have become more cautious and risk-averse. Job security has become more attractive and there has been a lack of desire to switch roles both amid and following the pandemic.
Of course, the end of the Furlough Scheme has pushed more people out into the job market. However, despite the numbers, we anticipate that this won’t help to satisfy demand. These workers are not those individuals with the right skill sets to transition readily into the tech sector.
The Tech Skill sets in highest demand.
These are the tech skills which the recruitment data tells us are in the highest demand.
- Business Intelligence – the data analysis of business information
- C#
- Developers
- Software Engineers
- Software Managers
We would agree with these categories, particularly in relation to software developers. We are finding that these roles are a critical hiring focus for our clients currently. We would also add QA testers to this list, as well as DevOps and Cloud roles.
In summary.
To conclude, 2021 has been a time of unprecedented activity for businesses without any real period of comparison. It’s difficult to predict what the future has in store, although some thinkers have likened the Covid 19 pandemic to the economic crash following the terrorist attack on the Twin Towers.
The rise in employment opportunities is optimistic on a macro scale. However, it is the severe shortage of skilled workers across many sectors that threaten the economic stability of the UK as a whole.
Widely speaking, the latest ONS Labour Market review reveals that there has been a 35% quarterly increase in advertised vacancies, bringing the total number of vacancies to 1.03 million. This is 249,000 higher than pre-pandemic levels, and the first time that it has been able to report a number higher than 1 million. In September, the job market has remained buoyant, with the number of job advertisements growing steadily.
As we have discussed, this would be great news if supply could meet demand. Recent work by the REC determined that 58% of recruiters have 30% more vacancies than before the pandemic, with almost all those questioned (97%) stating that it is taking longer to fill them.
When asked what their major concern was for their work in 2022, 90% of recruiters asked stated that candidate shortage would be the biggest challenge. It is doubtless that these shortages have the power to restrict the growth of UK tech as we move forward into 2022.
Here at Ignite we do share these concerns but like to think a little more optimistically.
We believe that the tech talent is out there, but maybe as recruiters, we must go a little further to find them. Perhaps we should encourage our clients to consider more junior level entries; suggesting an investment into training and development in place of higher salaries. Candidates have shown that they value mentorship and opportunities for professional growth over most other perks of employment. With the right investments, perhaps today’s rookies can become tomorrow’s superstars.
September has been a mixed bag. Let’s see what October has in store as we work toward the close of 2021.
