Tag: labour market

Data reveals a slowdown in hiring in May and June

A recession may become a reality sooner than expected, suggests new data from the Association of Professional Staffing Companies (APSCo). The research reveals difficulties in the UK’s labour market.

Traditionally, June showed a recruitment spike ahead of seasonal drops in July and August. This year, however, although numbers improved slightly in May, the latest research showed a slowdown in hiring between May and June, suggesting further drops in the summer months.

APSCo’s June research suggests that the economy is feeling the effects of Government uncertainty, a cost-of-living crisis, and substantial skills shortages.

According to the report, the number of permanent vacancies added dropped by 12% month-on-month in June, and the number of contract positions fell 11% year-on-year. It appears that permanent roles are on a downhill trajectory, down -2% between June 2021 and June 2022. Contract roles, however, increased 5% in this period.

Compared to pre-pandemic data, the number of permanent jobs being created dropped by 9% between June 2019 and June 2022, suggesting that the stability of the country’s hiring market and the economy is taking strain.

The report also revealed that placements dropped month-on-month for contract (-9%) and permanent roles (-7%). In terms of permanent salaries, the report showed a 2% increase month-on-month, but -3% decline, year-on-year.

Ann Swain, CEO of APSCo, comments: “A slowdown in hiring following the post-pandemic boom was to be expected, but in the current market and with talks of a potential recession in the pipeline, this decline is of concern. The UK’s post-COVID economy has been hit with employment strikes, skills shortages, Government uncertainty and a cost-of-living crisis. With controversial changes to rules around using agency workers during strikes voted in and the country facing continued uncertainty alongside Governmental leadership changes, employers and the recruitment sector have been hit hard. Stability is crucial as we continue to navigate such an ambiguous market. As the trade body for the professional recruitment sector, we believe that there is more to be done to make the UK’s employment sector competitive on a global scale. With recruitment activity slowing, we could be at a tipping point that sets the country on a downward trajectory unless swift action is taken.”

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The rise in job ads speaks to increased strength in the labour market

According to data from ANZ Bank, job advertisements in Australia rose by 18.4% in June 2022 on a seasonally adjusted basis when compared to the same period in June 2021. This pattern of online job postings is being seen across the globe as skills shortages continue.

On a monthly basis, job ads increased 1.4% in June following a small upward revision of the May number. The total number of job ads in June exceeded the recent peak in March signalling continued strength in the labour market.

When compared to January 2020, job ads were up 58.9% while the number of job ads totalled 243,523 in June 2022.

Catherine Birch, ANZ Senior Economist commented: “Growth in demand for labour is still outpacing supply but the sheer volume of unmet labour demand suggests underutilisation will keep falling and stay low even as demand growth is curtailed by higher inflation and rising interest rates. The very tight labour market is a key reason why we expect the Australian economy will be resilient in the face of these.”

The Bank’s job ads data is based on information provided by the operators of Seek.com.au and the Department of Education, Skills and Employment’s Australian JobSearch site (Jobsearch.gov.au).

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Recruitment sector among the fastest growing industries for entry-level roles

New data from LinkedIn has found that demand for recruiters is soaring in the UK. With the tightening labour market, LinkedIn’s data indicates that 2.9x more recruiter jobs were advertised on the professional networking site in April 2022 compared to January 2019.

The same trend has been noted across Europe during the same period with:

  • Germany (5.9x)
  • France (4.3x)
  • Spain (4.2x)

The recruitment industry is a great opportunity for entry-level talent. LinkedIn’s data regarding the fastest growing industries for career starters in the UK shows that the Staffing & Recruiting sector has grown by 65% year-on-year (2020-2021) for entry-level roles.

LinkedIn’s data showed that the fastest-growing entry-level roles in the UK were Recruitment Resourcer and Human Resources Administrator. Roles such as these require candidates with strong people skills, including sourcing, interviewing, and executive search.

Adam Hawkins, Head of Search and Staffing, EMEA & LATAM, at LinkedIn, commented: “It’s great to see that recruiters are in such high demand as the recruitment industry continues to play a vital role in helping businesses navigate a challenging economic and hiring environment. It’s a fantastic profession, particularly for those starting out in their careers, and presents endless opportunities for skills development.

In the UK, we’ve recently seen job adverts outnumber the amount of people unemployed for the first time since records began. As companies struggle to source the skills they need to succeed, recruiters will be more relied upon than ever to advise companies on how they can open up new talent pools and attract top talent.”

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ONS stats show increase in economic inactivity

The latest figures from the ONS have been released and what stands out is that even though average pay rises for the first quarter are at an average of 4% (excluding bonuses), this appears well below inflation. However, in real terms (adjusted for inflation), growth in total pay was 0.4% and regular pay fell on the year at negative 1.0%. Strong bonus payments over the past six months have kept recent real total pay growth positive but employers may find it even harder to retain talent through salary increases alone as the cost-of-living crisis continues in the UK.

The latest Labour Force Survey (LFS) showed that for December 2021 to February 2022 the employment rate remains unchanged on the quarter, while the unemployment rate decreased. Over the same period, the economic inactivity rate has increased slightly which signals a slight dip in the economic rebound following the end of the pandemic with inactivity increasing by 0.2 percentage points to 21.4% from December to February 2022.

There was a noteworthy increase, albeit small, in the number of payrolled employees for March 2022 which is up 35,000 on the revised February 2022 to a record 29.6 million.

The report showed that once again, the number of job vacancies in January to March 2022 rose to a new record of 1,288,000, with the rate of growth in vacancies continuing to slow down.

Jon Keeble, employment partner at DWF commented on the latest report: “The latest ONS labour market figures demonstrate continued resilience in the labour market. The highlights for the period between December 2021 and February 2022 show a largely unchanged employment rate of 75.5%.

“With legal requirements largely removed across the UK and a shift over to personal responsibility we are very much in the phase of having to live with COVID-19. Although employers are now faced with a number of practical challenges as we enter this next chapter, the relaxation of restrictions should have a positive effect on the labour market.

“We are yet to see what impact the cost-of-living crisis will have on the labour market and whether the Chancellor’s Spring Statement and the rise in the National Minimum Wage will provide sufficient support.  Undoubtedly, employees who are struggling to cope financially will be seeking out those employers, which are able to provide the most attractive rewards package.”

James Reed, Chairman of Reed.co.uk, also commented: “The economy is facing a crunch point as businesses contend with serious challenges, from rapidly rising inflation to severe labour shortages. The jobs boom that began last year continues to be reflected in the ONS’s labour market statistics. With job postings on Reed.co.uk in March increasing 18% year-on-year and 14% month-on-month, this trend shows little sign of slowing. But with economic growth now as low as 0.1% and unemployment at historic lows, the jobs boom is in danger of becoming a jobs overload.”

“The difficulties businesses now face in hiring staff, are having a knock-on effect on supply chains, production output and the quality of goods and services. This is slowing the UK’s economic recovery from the pandemic.

“There are now 8.8 million people who are economically inactive in the UK, which is 600,000 more than at the start of the pandemic. This is a symptom of what I call ‘The Great Lie Down’, with many workers leaving the workforce altogether, some through long term sickness and others preferring early retirement or different lifestyle choices. If these workers are to be coaxed back, they will need convincing with attractive employment arrangements, higher wages and better conditions and benefits.

“Currently, less than 20% of these people who are economically inactive say they would like a regular, paid job. However, if it was possible to help this group find work then that would be of great benefit to both them and the economy.”

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