The monthly recruitment data from recruiters across the UK points to a market that is moving within some long-running trends. Shifts are marginal, but small changes across all the KPIs indicate the response of employers to economic patterns.
Leading voices from within the recruitment sector report that employers are feeling more hopeful as we move into the final quarter of the year.
After an abnormal high thanks to a post-pandemic swell, permanent placements have been falling over the past year. And while permanent hiring continues to slow, fewer organisations reported a slowdown over September. As a result, the rate of decline was shallower than over recent months.
Other recruitment trends show a similar story – small shifts within larger trends.
The recruitment landscape – September 2023.
Here is a closer look at the data beyond the headlines.
Vacancies.
Across both the permanent and contract markets, there was an unusual reduction in the demand for both permanent and temporary staff. Although the rate of the decline was only slight the number of open job vacancies across both markets has been on an upward trajectory since February 2021.
The official data from the ONS supports this. Across the UK there was an overall reduction in the number of vacancies in the 3 months to August this year. Within this period, the number of vacancies dropped by 64,000, landing at 989,000 open roles. This was the first time in 2 years that the vacancies have slipped below the 1 million mark.
The public vs. private sector.
The demand for permanent staff dropped among both the private and public sectors. However, it was the public sector that has witnessed the steepest rate of decline.
Within the private sector, the demand for contract staff rose at a softer, but still robust, pace. Over in the public sector though, the requirement for temporary staff fell over September.
Vacancies by sector.
Looking at the numbers in more detail, 50% of the recorded sectors reported a demand for staff. IT and Computing fell into the alternate 50% but only just, and recorded the smallest drop of those that reported a drop.
It was a similar story within the contract market. Again, only 5 out of the 10 sectors witnessed an increased need for staff with IT and Computing reporting a small decrease in demand.
The demand for skills.
Recruiters working within the technology and digital space have reported requirements for the following skills.
- AI Developers
- Analysts
- Cloud Engineers
- Cyber security
- Data scientists
- Developers of all kinds.
And again, there are a number of job roles that bridge the IT sector with the executive and professional services. For example, we have had requirements for all of the above – particularly within the professional services domains.
Head to our jobs pages and you’ll find opportunities for all these roles within organisations bringing game-changing tech and tools to professional services businesses. The use of Generative AI is an area that has the potential to offer transformational advantages to legacy sectors.
Skills in excess.
The report informs that IT service desk support is an area where skills are in excess supply. We have taken a few requirements for these IT professionals over the past month from businesses needing to support their digital transformations and to increase the level of support given to their internal systems.
As technology becomes more sophisticated and workforces become more widely distributed, we think it’s probable that the demand for all levels of IT support staff will increase.
Placements.
Permanent placements.
September was yet another month in which permanent placements have been in decline. This takes the current period of contraction to 12 months. Despite this, the rate of this squeeze eased from August when we saw the lowest permanent placement rate in 38 months.
As in the months before it, recruiters have reported that employers are hesitant to take on new permanent hires. Most commonly, it was cited that recruitment freezes and budgetary pressures amid rising costs are to blame for lower numbers of permanent placements.
On top of this, some recruiters also pointed to skills shortages within some sectors to explain this shortfall of placement activity.
Recruiters across all 4 areas of the UK told a similar story; although permanent placements are still below the average, the rates of contraction improved in September.
Contract billings.
The greater pressure on organisational budgets caused an uplift in the placement of contract staff over September and we ended Q3 showing a modest increase. This was true in all areas except the South of England while the quickest rate of expansion was seen in the capital.
Candidate availability.
Across the permanent and contract markets, September was the 7th successive month in which recruiters have seen an increase in the number of available candidates.
However, despite this, the rate of expansion reduced from August and fell further still from July’s recent record. Indeed, it was the softest rate of expansion since April this year.
Once again, these higher numbers have been attributed to the widescale restructuring of organisations. Restructuring not only forces redundancies, but the changes in line management, job titles, and responsibilities impel resignations for many.
Candidates are also reporting a desire for greater flexibility within hybrid working patterns and seeking roles with better pay and monetary benefits amid the cost-of-living crisis.
These trends of permanent candidate availability have been true for all 4 areas of the UK but were particularly relevant for consultants based in the North of England.
Within the temporary market, the availability of contract staff has expanded rapidly, with its rate of growth holding close to August’s 32 month record. This swell has been attributed to a slowdown in market conditions and corresponding layoffs.
The sharpest increase in candidate availability was seen in the south of England whilst recruiters in the Midlands recorded the softest.
Pay and salary.
With London as the exception, the rate of starting salary inflation moderated at the end of Q3 and was the softest rate of growth recorded since March 2021.
Once again, it was reported that starting salaries have been driven higher by cost-of-living pressures and to attract skilled workers within a competitive landscape.
It was a similar story within the temporary market. Although the daily and hourly rates paid to contract staff increased again in September, the rate of growth softened from August and was the weakest recorded since salaries and pay began to rise in March of 2021.
The ONS also reports steady increases in employee earnings. Over the 3 months to July, it was reported that the average earning of UK workers has increased by +8.5%. According to official figures, this has been the quickest rate of expansion on record with the public sector experiencing a historic rise over the last 3-month period at +12.2%. Meanwhile, the earnings growth within the private sector also remained elevated at + 7.6%.
