Economic uncertainty continues as a new threat emerges
The Recruitment Employment Confederation (REC) has released a UK Jobs Outlook and opinions of the UK jobs market from recruitment companies across the UK in the first quarter of 2022 This provides a useful insight into the confidence and hiring intentions of UK businesses.
Economic Uncertainty
While the UK’s recovery has been going for several months, we have another threat to worry about – a downturn in living standards.
Driven by rising inflation, the cost of living crisis for UK households is likely going to be the defining economic feature of this year. And while no one can be certain of how much prices and earnings will rise, the Russian-Ukrainian war has further disrupted supply chains and pushed inflation up, affecting living standards even more across Europe.
On top of this, although businesses are investing more into hiring and training, more people are exiting the labour market than entering it. This is making is difficult to recruit.
However, according to the Resolution Foundation, it is actually weak productivity rather than high inflation that is threatening living standards the most. And if we want to see meaningful economic growth, we need to make sure productivity and wage growth perform better than expected in years to come.
A strategy to overcome this will be to focus on ensuring employment rates recover to pre-pandemic levels. A big part of this will be encouraging people back into the labour market. Especially older people who have taken early retirement. Governments and business leaders across the UK need to work together and try to resolve these issues sooner rather than later.
As labour market specialists, recruiters will once again play a key role in this task. This includes helping government with activation schemes to supporting employers with attracting people from all backgrounds back into work.
Slowdown in Hiring Activity
Latest survey data pointed to softer expansions in both permanent staff appointments and temp billings across the UK. Recruiters frequently mentioned that candidate shortages continued to weigh on their ability to fill vacancies. Therefore the overall availability of workers in the UK has continued to fall rapidly. Experts believe a generally low unemployment rate, uncertainty related to the pandemic and Ukraine war, fewer EU workers and robust demand for staff had limited worker availability.
UK Jobs Outlook on Permanent Hiring
Permanent placements have slightly increased with the Midlands seeing the sharpest rise and the South of England the lowest. Vacancies have continued to rise and the level has outpaced temporary roles. Hotel and Catering roles were one of the top industries to have the largest increase in vacancies.
However although placements and vacancies have rises, the demand for workers continued to outstrip supply for the fourteenth month consecutively. There are reports that people are reluctant to switch roles due to uncertainty related to the pandemic and the Ukraine war. There are also now fewer EU workers which will be adding to the worker availability issue.
The sharpest fall in permanent candidate numbers was seen in London, though historically marked reductions were also seen across the other three monitored English regions.
UK Jobs Outlook on Temporary Hiring
Temporary hiring has slowed for the second month in a row although vacancies are at an all time high. Hotel and Catering was the industry with the largest increase in demand for staff. It comes as no surprise that the demand for temporary staff has increased and availability of temporary workers has fallen. London has the sharpest drop in worker availability and the Midlands the lowest.
UK Jobs Outlook Statistics
- Vacancies at their highest level since 2001 (when this report began)
- Employee earnings up by 4.8%
- The UK Unemployment rate stands at 3.9%
The original report can be viewed via the Recruitment Employment Confederation Member Portal
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