Responding to the ONS Labour Market data (November) published this morning, recruitment and other experts have been sharing their reactions through Newspage with the following comments showing concerns of troubled times ahead:
Emma Summers, founder of Bath and Bristol-based Juice Recruitment: “The sheer level of economic and political uncertainty is definitely making employers more cautious about hiring at present, which may explain the fall in vacancies. Shoot from the hip has been replaced by sit-tight. This is in stark contrast to the recruitment hiring trends we saw earlier this year. The permanent jobs market has slowed for the first time in two years but the temporary market remains strong, suggesting that confidence in UK Plc is waning.”
Chris Maslin, director at Tunbridge Wells-based employee ownership specialists, Go Eo: “The jobs market is stagnant, employees’ confidence moribund. Unemployment may be low but so is the motivation of many employees as the economic storm clouds darken. Many businesses are trying to recruit, but people who are currently employed have a “better the devil you know” mentality. They are reluctant to risk moving jobs given the cost of living crisis, the fact that a highly uncertain winter is approaching and due to the old adage that those last in are often first out. I can’t see this stasis in the market changing until Spring.”
Marcus Nanson, managing director at mortgage and financial services-focused NRG Resourcing: “No-one knows how long and deep the recession the Bank of England is predicting will be and that’s creating a tangible uncertainty among employers. It’s slowly but surely changing from an employee to an employer market again. However, with different opportunities available to people post-Covid, I don’t believe it will ever be a completely “get what you’re given” jobs market again. The general public are more in tune with what they want work-wise now, and are more willing to wait for it, or leave for it. Real terms pay is being hit hard but companies who provide flexible working, which saves people money on commuting and other costs, can go some way to help address this. As the cost of living soars, flexibility is a great perk that works well for businesses that can function well with it.”
Nicky Acuna Ocana, managing director at professional services recruiter, Ambition: “Within the professional services sector, like many others, a growing number of firms are starting to put a hold on new hires. There is real nervousness surrounding the economy. I believe we will see unemployment rise in 2023 as the extreme economic uncertainty and sky-high inflation puts more companies into receivership. Employees are still demanding flexibility, as many people still haven’t started to feel the bite of rising mortgage rates, as their fixed rates have yet to end. The mortgage shock many will experience could see a lot of people view their existing employer in a different light and simply be grateful to have a job.”
Debbie Denyer, an executive coach at Beaconsfield-based Coach The Difference: “At a time when employees are being hit by the cost-of-living crisis and are looking for increased wages, or alternative employment opportunities, hiring is starting to slow down. With the recession looming, companies are under pressure. They’re looking for alternatives to offering pay rises to retain employees, such as offering travel and childcare cost reduction benefits. The news is full of reminders that during difficult economic times jobs become less secure. If the warning signs of a long recession are realised, unemployment is likely to rise. The important question for employers is how to keep those employees, who would usually have moved on, engaged. Leaders should have conversations with their employees about what motivates them and how can they best use their strengths. This will create opportunities to increase their productivity and happiness.”
Saira Demmer, CEO at Midlands-based SF Recruitment: “There are dark clouds looming over the economy and pay is under pressure due to inflation. However, we’re still seeing a huge desire in the candidates we speak with for flexible working. The pandemic triggered a paradigm shift in the mindset of employees and it’s one that will not be reversed by the economic uncertainty we’re facing. As well as saving them money on office costs, employers increasingly understand that flexible working makes for a happier, and therefore more productive workplace, so it’s a win/win for staff and companies alike.”
Louise Ogilvy, managing director at Ramsey-based startups recruiter, Propeller-Tech: “In the tech industry, the demand for skilled workers far exceeds the supply. As a result, employees in this field often hold more power than their counterparts in other industries. They can be choosier about which companies they work for, and they can negotiate for higher salaries and better benefits. We have seen the average salary for a software developer increase this year as remote working now means that candidates outside of London can seek to join a London-based firm and therefore expect the same salary as those living in the City. Sadly, many employees do not feel confident enough to ask for a pay rise and instead look outside of their current employment to gain a higher salary. This has resulted in more counter-offers than we would usually see, given that the cost to replace an employee can quickly amount to tens of thousands of pounds. Where we have seen some of these smaller and perhaps more financially constrained companies winning is in relation to flexibility. Our startup clients have mostly been created during and post-pandemic, where remote working was the norm rather than the exception. A return to office work is one of the key reasons we are seeing software engineers looking to move roles as they seek to maintain the flexible working practices that were accelerated, and in many cases engendered, by the pandemic.”
Lauren Thomas, economist at Glassdoor: “Wage data indicates that while average nominal wages have grown at almost record levels this year, indicating that increased job hopping and salary rises have paid off for employees, real wage growth is at a decade-long low thanks to sky-high inflation. As news of tech layoffs spreads, Glassdoor’s data shows that employees are increasingly anxious with the discussion of layoffs doubling and mentions of recession up tenfold from last October. Hiring has also taken a hit, with mentions of hiring freezes up more than 500 percent. However, this isn’t 2008. Unlike the Great Recession, the current shortage of workers is much more acute and even a potential recession would be unlikely to result in the same peak of unemployment that we saw back then. There are reasons to be hopeful. Vacancies are likely to remain higher and both redundancies and unemployment are lower than before the pandemic.”
Tahina Akther, barrister and co-founder at Wildcat Law: “We are seeing an increase in enquiries from people who have been dismissed and businesses looking to make people redundant. While this is not yet a tidal wave, it is certainly showing signs of being a storm swell. Some companies are taking the opportunity to protect their business for what they see as difficult trading times ahead, by reducing wage budgets. Those that are being laid off seem to be able to find work quickly due to other companies still actively hiring but the warning signs are definitely flashing. We are also seeing an increase in enquiries from employees who accepted jobs on the basis of being able to work flexibly and are now finding that their new employers are changing what that means in practice. One employee told us that their employer had promised they could choose how many and what days they worked in the office and understood that they had childcare commitments. They are now being told they have to work three set days in the office or face losing their job. As the economy stalls, the goalposts are starting to shift.”
Louise Burns, director of Tyne and Wear-based Nineteen Recruitment: “I think the health of the jobs market varies dramatically depending on the sector. Across healthcare, social care and education, job vacancies still far outweigh the number of interested candidates. I suspect this is because the challenges of the pandemic drove so many talented education, health, and social care professionals out of their jobs, and out of the sector altogether. These opportunities are far less appealing now than they ever were pre-Covid. In other sectors, there is definitely movement. It’s still a candidate-driven market in my opinion, but interest in jobs is on the up.”
Richard Carter, head of fixed interest research at Quilter Cheviot: “Despite storm clouds growing heavier over the UK economy, the UK jobs market remains resilient for now. With winter drawing in and increased energy bills starting to really bite businesses’ bottom line it remains to be seen how long this can last.
“The unemployment rate for July to September 2022 decreased by 0.2 percentage points on the quarter to 3.6%, while the UK employment rate for July to September 2022 was 75.5%, largely unchanged on the previous quarter.
“However, in real terms, total pay for this employment fell by 2.6% and regular pay fell by 2.7%. This remains one of the largest falls in pay since 2001. Although there was growth in average pay this growth is totally eclipsed by the inflation we are experiencing meaning that peoples pay packets simply will not stretch so far.
“Although the UK is not officially in recession it looks almost certain that we are heading for one. The budget on Thursday will further illustrate the precarious financial position the UK is in and while this fiscal event will hopefully be better welcomed by the markets compared to the mini-budget delivered by Truss and Kwarteng, it is certainly going to spell pain for public services and bring higher taxes for all further muddying the picture as we head into winter.“