The main findings for January 2023 from the latest UK Report on Jobs, sponsored by KPMG and the REC (Recruitment & Employment Confederation), are as follows (the full report is available on request):
Permanent placements fall for fourth straight month
Lingering uncertainty over the economic outlook and hesitancy to commit to new permanent hires weighed on recruitment activity at the start of 2023. Permanent staff appointments fell for the fourth month in a row, albeit at the slowest rate over this period. Firms instead often leaned on temporary workers to fill vacancies. Temp billings rose at the quickest rate since last September, albeit mildly overall.
Growth of demand for staff picks up slightly
Recruiters signalled a stronger increase in demand for staff during January, with overall vacancies expanding at the quickest rate for three months. That said, the upturn remained softer than the survey's long-run trend. Temp vacancies rose at a stronger rate than permanent staff demand, but there was an improvement in growth for the latter and a slowdown for the former.
Starting pay inflation remains elevated
Starting salaries continued to climb sharply in January. The rate of inflation continued to soften from March 2022's all-time record, however, and was the slowest seen in 21 months. In contrast, temp pay inflation quickened to a fourmonth high at the start of the year. According to recruiters, candidate shortages pushed up rates of starting pay, while there were also mentions of the rising cost of living placing upward pressure on salaries and wages.
Overall candidate numbers fall at softer, but solid rate
The downturn in total candidate supply moderated further at the start of the year. Though solid, the rate of contraction was the softest seen since March 2021 and much slower than the average over 2022 as a whole. A weaker fall in permanent labour supply helped to offset a quicker drop in temp candidate numbers. Recruiters frequently mentioned that the uncertain economic climate, concerns over job security and generally tight labour market conditions had limited the availability of workers.
Employers continue to turn to temporary workers to fill skills gaps
Against the backdrop of double-digit inflation and soaring energy prices, economic uncertainty among businesses continues to grow. Some employers have understandably become more cautious when making hiring plans this year, but notably, vacancy levels remain historically high which means hiring especially for temps will remain strong.
Hopefully this will provide you with an excellent insight into a myriad of critical recruitment topics including hiring activity, candidate availability and salaries. As you strive to keep your current employees happy and attract the best new talent to help your company grow you may find some of the content very useful.
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