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Increase in candidates suggests ‘tide could be turning’ in UK job market

By Nagasunder in UK Business News, posted April 12, 2023

A new study shows the overall quantity of job candidates in the UK has increased for the first time in more than two years.

The increase is "modest", but the rise in labour availability in March was the first of its kind in the UK since February 2021, according to research from the Recruitment and Employment Confederation (REC) and KPMG.

Researchers say the improvement in personnel availability—both permanent and temporary—along with improved "confidence among job seekers" and "signs of a relative improvement in hiring conditions" were the main factors in the increase.

The uptick shows the things could be changing for the British economy's labour market tightness, which has caused widespread alarm in recent years.

Employee shortages remain a serious concern for many businesses but REC CEO Neil Carberry called the overall increase in available applicants "big news."

He said: "This suggests that, while the market is still tight, it should be getting gradually easier for firms to hire over the next few months."

"The continuing fast rate of pay growth is likely reflective of the impact of inflation on wage offers, as well as low labour supply. That means increasing pay is likely to persist, despite more people beginning to look for work."

Mr. Carberry added it was "still a good time to be looking for work", particularly in hospitality, healthcare, accountancy, and financial roles.

However, the survey highlighted redundancies caused by economic instability had also increased the number of new candidates looking for work - and that the jobs market was still well behind pre-pandemic levels.

Mr. Carberry said governments and businesses needed to do more to attract potential recruits.

He added the chancellor's recent budget initiatives were insufficient.

Carberry said: "This cautious optimism belies the scale of the challenge we face in tackling shortages and addressing economic inactivity."

The UK Report on Jobs was based on a poll of almost 400 recruitment and employment consultancies.

It reported that in March, the index measuring the availability of workers to fill positions reached 51.4, marking the first time in 25 months that it was in positive territory.

The seasonally adjusted index shows an improvement if it rises over 50 from the previous month.

The index also showed the supply of workers had been rising quickly in the UK since 2019 before it abruptly fell as COVID-19 struck the economy.

Following a wave of pandemic-related layoffs, the previous increase—in February 2021—had only been a "fractional" boost; throughout the following two years, worker availability continued to fall.

Although the rise in the number of positions on offer was slightly slower than February's figures, today's report also reveals starting salaries and total openings are continuing on an upward trajectory.

KPMG partner Claire Warnes said: "While the labour market continues to show resilience, it is nowhere near pre-pandemic levels of stability,".

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The survey also discovered the surge in temporary billings reached a six-month high in March, suggesting that businesses chose temporary employment over permanent placements, which experienced a "marginal" fall, due to business anxiety about the economy.

Just Eat, a major delivery company, is one of the businesses that lately increased its reliance on temporary labour.

It made plans to replace its hybrid system of employees and self-employed with gig economy workers last month, including the elimination of 1,700 jobs.

Source: Sky News

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