In the evolving landscape of the UK labour market, the latest report from the Recruitment & Employment Confederation (REC) for June 2023 highlights key trends. The report reveals a sharp increase in candidate availability, a slowdown in permanent placements, and a moderate decrease in pay pressures. As the economy faces uncertainty and companies turn to temporary hires, the need for upskilling and reskilling becomes crucial. This blog post will delve into the key findings of the report and discuss their implications for your hiring plans.
Candidate Supply Rises Rapidly:
One of the major highlights of the report is the significant rise in candidate availability. This upturn has reached the highest level in two and a half years. This surge in supply is concerning for the economy as it reflects the effects of a sustained recruitment slowdown and increasing redundancies across various sectors. The market remains resilient, with notable demand for people right across the technology sector.
Lingering Economic Uncertainty:
The uncertainty surrounding the economy has led to employers favouring temporary and contract hires over permanent placements. Businesses are cautious about making long-term commitments and prefer flexibility in their workforce. This trend is likely to continue until economic conditions stabilise.
Pay Pressures Moderate:
While pay rates have been rising over the past months, there has been a moderation in pay pressures. The rate of salary increase has reached a 26-month low. Companies are under pressure to balance their budgets and control costs, resulting in a slowdown in the growth of salaries for both permanent and temporary staff.
Addressing the Mismatch in Skills and Vacancies:
An urgent concern highlighted by the report is the evident mismatch between the skills of available candidates and the vacancies in the job market. The demand for skilled workers remains high, but finding suitable candidates with the desired skills is a challenge. It is imperative for the industry and policymakers to focus on upskilling and reskilling initiatives to bridge this gap.
Implications for hiring managers:
The rise in candidate availability presents both opportunities and challenges. On the one hand, it provides a larger pool of candidates to choose from, increasing the chances of finding qualified individuals for any roles that you might have. On the other hand, the mismatch between available skills and job requirements means that finding the right candidates may still be a challenge.
The labour market is resilient amid employers’ concern about economic strength:
The latest Report on Jobs data has found that starting salaries for permanent staff have risen for the 28th consecutive month, while pay inflation for temporary staff has also increased. However, after adjusting for inflation, real-term total pay fell by 2.0%. In addition, the number of active job postings has decreased by 2.4% in the past week, although there has been a significant increase compared to last year. The report suggests that the labour market remains resilient, but employers are cautious about hiring due to economic uncertainty.
It is advised for job seekers to be patient and for employers to address the mismatch between available skills and job vacancies.