As we digest the release of the ONS labour market data published this morning, the following comments give some interesting insight into the real temperature of today’s UK recruitment and jobs market as we go through these unprecedented times:
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.”
Emma Summers, founder of Bath and Bristol-based Juice Recruitment: “There’s a lot of talk about uncertainty among employers amid the current economic turmoil but it fails to take into account how battle-hardened many companies have become in recent years due to the pandemic. Uncertainty, these days, is the bread and butter of British businesses. They live and breathe it. Businesses have experienced so much economic uncertainty since 2020 and have demonstrated such resilience that they are continuing to push forward and battle on. As a result, we are still seeing businesses hiring and looking to the future. Where we have seen change is in the shift of power between candidates and employers. Candidates no longer hold all the cards and we are starting to see employers having more choice when they are recruiting. Employees, for their part, are looking at their overall packages and not just salaries. If they have the option to earn commission or are able to work extra hours and they feel they are well looked after, valued, have the option of flexible working and love what they do, money is not such a motivator. If none of the above are on offer then pay rises in line with inflation will definitely be on the agenda. Utilitarian employers will be condemned to utilitarian employees who focus on pay and pay alone. The current skills shortage across numerous sectors is due to Brexit and the lack of EU workers now available. The talent pool has shrunk as all sectors are now fishing from the same pond. In some sectors, however, there are vacancies aplenty. It is very much a patchwork employment market.”
Steven Cameron, Pensions Director at Aegon comments: “Today’s earnings figures show an increase in total pay of 6.0% year on year. However, allowing for inflation, even those receiving ‘average’ wage increases are seeing their purchasing power tumble, with real total pay falling by 3.4%* as price increases show no signs of slowing. Rising interest rates pose further financial challenges for those borrowing money and is particularly concerning for those on variable mortgages or whose fixed rate term is coming to an end.”
“As the Government focusses on growth, employment figures are vitally important. Within this, particular focus is needed on the over 50s including the 50 to 64 age group where the number who have taken themselves out of the workforce remains particularly high – at least partly a legacy of the Covid-19 pandemic. Older workers have valuable skills, expertise and experience so it’s important we support those looking for ongoing or brand new employment opportunities to play their key part in the government’s economic growth agenda. With the state pension age increasing again to age 67 in 2028, and with further increases penciled in, remaining in work for even a couple of extra years can offer a powerful way to boost pension savings.”
Ben Keighley, founder of social media recruitment specialist Socially Recruited comments: “Cornered by the cost-of-living crisis, the labour market is becoming much more finely balanced, with vacancy numbers reducing sharply. Another record low for unemployment is still being overshadowed by high inactivity figures but tens of thousands of people are expected to rejoin the workforce, helped in part by businesses digging ever deeper to satisfy a relatively small talent pool. Many are bringing out the big guns, with strong pay rises and bonuses, particularly in the private sector, helping to take some of the edge off inflation that is continuing to take a significant slice out of take-home pay. The wage rise for a million NHS workers earlier in the summer, backdated to April, has had a clear bloating impact on average median pay growth in the sector. This is part of the economy where a lack of new starters, coupled with historic vacancies, is ramping up the pressure on staff. And while things look rosier for hospitality workers, much of its impressive 7.4% growth rate has come because the food, pub and hotel trade relied heavily on the furlough scheme to stay afloat.”
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. Flexible and hybrid work are both here to stay. Recent Glassdoor research found that employees happy with their hybrid work situation were less likely to apply for other jobs. Job seekers’ preferences for hybrid or flexible work mean that they will stick around, even through a cooling labour market. For the past two months, job vacancies have dropped as employers exercise caution amid rising energy costs and an uncertain economic outlook. However, despite this slowdown in attempted hiring, employees still hold most of the cards in the war for talent as the labour market remains tight. Face-to-face, relatively low-paid industries like healthcare and hospitality have particularly struggled to fill vacancies since pandemic lockdown restrictions were lifted. The labour shortage in healthcare shows no sign of improving anytime soon, with the NHS and social care facing drastic staffing crises. While hospitality is particularly vulnerable to energy price increases and cutbacks in consumer spending, job openings remain elevated as the supply of EU citizens has dried up and other industries offer higher pay and more flexibility.”
Louise Skittrall, founder of Swindon-based Robinson Grace HR Consultancy: “It’s still a candidate-led market, with passive job seekers only moving for the most enticing and stable of offers. We’ve had candidates at offer stage asking for probation periods to be removed from offers, and bonuses guaranteed for the first year. People are also negotiating hard on the hybrid working split of days working from home. So, whilst there is movement in the market, with people still taking up new opportunities, they are looking for more certainty and less risk. As a result, start-ups and sectors more reliant on disposable income such as hospitality are really struggling to recruit.”
Ryan Venner, Managing Director at Calne-based recruiter, Premier Jobs UK: “Despite the dark clouds of uncertainty that are blanketing the economy, employers are continuing to push ahead with recruitment with a view to achieving their planned 2023 goals. Due to a shortage of available experienced talent, candidates still have the upper hand currently, a trend that has been present for several years now. As a result, businesses are still seeking advice on how to remain attractive before they launch a job ad, as it’s about more than just pay these days, but flexibility, too. We’re finding businesses that are embracing new talent by supporting trainees are making great headway. There remains a particularly strong pipeline of individuals looking to enter the financial services industry.”
Kerri-Ann Hargreaves, MD, Talent, at IronMarket: “The talent market is improving and we are seeing a shift in attitudes. No longer are candidates focused simply on logistics and pay, but they are also now assessing the excitement of a business and brand. Organisations are starting to realise they’ve made some mistakes in the way they’ve approached their recruitment, as inflated salaries are simply not sustainable. We are seeing a shift in the attitudes of employers who have previously accepted that candidates hold all the cards. The landscape of talent attraction is changing and businesses are now pushing back. The recruitment landscape has shifted, big time. Hiring people has become more competitive than ever. People have become braver, so have hiring businesses. The market will once again shift from being candidate-led to hiring-led. I see the landscape changing significantly in 2023. It already is.”
Chris Maslin, director at Tunbridge Wells-based employee ownership specialists, Go Eo: “It feels like the jobs market’s stuck in a rut. The one positive in an otherwise miserable economic climate is that unemployment is low. Plenty of businesses are trying to recruit, but nobody’s applying. The rocketing cost of living is likely to mean many people already in work are reluctant to switch jobs, as they don’t want to risk the instability of a new job. Perhaps they could get a few thousand pounds more elsewhere, but the combination of big bills to pay and the uncertainty that comes with a new probation period just won’t appeal to many people right now. Better the devil you know.”
Kieran Boyle, MD of Gloucester-based CKB Recruitment: “We certainly aren’t seeing any slowdown in our industries, namely insurance and financial services, and vacancies still remain at an unprecedented level. This, in turn, means the candidate is still king, which is still pushing up salaries. We’re also continuing to see candidates looking for hybrid employers, too, and don’t think that will change anytime soon despite the cost of living crisis and uncertainty in the economy. The pandemic was a catalyst of fundamental change in the UK workforce.”
Louise Burns, director of Tyne and Wear-based Nineteen Recruitment: “The social care and education sectors are still really struggling to recruit. Candidates are few and far between, and when candidates are identified, they are demanding so much more than what most employers are able to offer. Candidates want higher salaries and increased flexibility, and for many employers, this just isn’t viable in the current economic climate. There are no winners in these stalemate situations.”
