Anecdotal evidence from recruiters echoed the national government statistics in September.
Recruitment activity across the private sector is pretty flat with many businesses holding their cautious position.
Spokespeople from key recruiting bodies such as the REC have suggested that it’s likely to remain this way until at least the end of October. The Chancellor’s first budget will allow the government to drive confidence in the economy.
September saw a moderation of permanent starting salaries, which may also help encourage the Bank of England to lower interest rates. This will be a welcome relief to businesses and may inject some life into their hiring activity. Recruiters have told a similar story…projects are ready to go, but the hiring to execute these works is on hold pending approval.
We’ll have to wait until the end of October to see what strategies the Chancellor and the new government has to boost key growth enablers. For Here is the latest look into the recruitment activity across September.
The Recruitment Landscape. September 2024.
Vacancies.
The statistics from the ONS point to another drop in vacancies in the 3 months to August this year. This is the 26th month that a quarterly decline has been reported. In addition, the latest contraction is the steepest to date.
Overall, the number of vacancies in the UK stands at 857,000; a drop of 140,000 year on year. Despite this huge decline, vacancies are still 61,000 higher than pre pandemic levels.
Recruiters across England can attest to this fall. September was the 11th consecutive month that a decline has been registered. Not only this, but the rate of decline accelerated with a contraction the steepest since March.
We have come to expect this from the permanent market, but September also saw a contraction within the temporary sector. These vacancies fell for the 2nd consecutive month with an alarming rate of contraction; the fastest since July 2020.
Ignite says.
We have recently been hunting for a Solutions Architect for a large omnichannel retailer. As we talked to candidates, it became clear that the contract market was largely very slow. We chatted to many talented candidates who were ‘hard and fast’ contractors; always in a contract and had been so for many years.
They were now very open to discussing our permanent role due to a distinct lack of opportunities within an environment that had previously been abundant.
Public vs. Private.
Permanent and contract vacancies in the public and private sectors fell in September. The steepest rate of contraction came from the public sector in both cases.
Vacancies by Sector.
Within the permanent market, 6/10 studied sectors saw a drop in vacancy numbers. The retail sector saw the steepest fall, followed by IT and Computing.
The demand for temporary workers saw a bigger sector fall. 90% of industry areas registered a drop. Only blue-collar work recorded a growth. Executive and Professional vacancies fell the hardest, and once again, IT and Computing came in silver position.
Demand for Skills.
Where there was demand for workers, these skills where the most in demand across IT and Computing.
- Cybersecurity
- Data Scientists and Engineers
- Developers, especially Full Stack and Java
- IT Operations
- Software roles especially Architects and Engineers
- Technical Sales roles.
Placements.
Permanent placements.
September saw a further fall in the number of permanent placements. The current downturn has now grown to two years. Despite the rate of contraction still being significant, it did ease slightly from August’s 5 month record.
Businesses seeking permanent employees are showing caution across all studied areas of the UK. The largest decline was seen in the South and the smallest drop was reported in the Midlands.
Temporary billings.
Billings from temporary roles fell for the 3rd consecutive month in September. The rate of contraction was the highest since April. Tight client budgets and an ongoing uncertain business environment have been blamed for the recent run.
London reported the steepest reduction in billings while in contrast, the Midlands’ market was slightly more buoyant. Those recruiters recorded a marginal increase.
Candidate availability.
Active candidate numbers increased again in September and extended the current period of expansion to 19 months. The rate of growth softened, however, and was the lowest since February.
Temporary and contract worker availability tells a similar story. This latest expansion in availability was sharp, thanks to fewer contract vacancies and more people out of work.
This rose at similar rates across England, with the most pronounced growth occurring in the South of England.
Pay and salary.
Permanent salary.
As we mentioned at the start, typical permanent starting salaries steadied a little in September. Although they did increase once again, the rate of inflation was modest and the slowest in the 43-month sequence of growth.
Recruiters told one of two versions of events. Where salaries increased, this was down to a shortage of suitable labour and where organisations were still willing to compete for higher-skilled candidates.
By comparison, it was also suggested that salary rates were moderated by a greater number of job hunters amid a cooling demand.
The midlands reported the biggest salary increase, while those recruiters in the North reported the smallest rise.
Temporary pay.
Within a market that is abundant with workers and has a lack of available roles, recruiters saw a fall in temporary pay rates across September. This ended a 3.5-year period of salary growth.
Temporary salaries in the North increased slightly, whilst rates in the capital showed the heaviest decline.
ONS salary data.
The data from the ONS supports this national trend. On average, employee earnings rose on an annual basis in the 3 months to July. However, the rate of growth was only 4%; the slowest since November 2020.
The growth within the public sector was most notable thanks to the one-off payments made to NHS and Civil service staff last year. At just under 1%, public sector growth was the lowest since 2015.
Private sector earnings also eased over this period – albeit less dramatically. It fell to 4.8% in July, down from 5.1% the previous quarter.
In conclusion.
As we enter the start of Q4, how the year ends will largely upon the new government’s strategy for instilling business confidence amongst employers. Strategy around key growth enablers such as workforce infrastructure and access to capital will be critical. There will also need to be some clarity over the impending changes to employment law.
We hope that the start of November brings a burst of employer confidence that will enable businesses to reignite both growth and hiring plans. The projects waiting in the wings require positivity to get going – let’s hope October and November deliver green shoots that extend into 2025.
Are you looking to hire in Q4? We can help!