Following the close of quarter four and the start of the new financial year, we are seeing two key standouts in the recruitment market at this moment in time:
Candidate availability increasing
Decline in overall staff placements due to economic uncertainty
Here, our Permanent Recruitment Team provide an overview of the current recruitment market and share their insights on what they expect to see in in quarter one.
Key takeaways for Q4:
January
Sharp decline in permanent placements
Total vacancies declined for fourth time in five months
Rise in candidate availability
Temporary placements only fall slightly
February
Candidate supply rises sharply as vacancies drop at faster pace
Staff placements fall again amid ongoing economic uncertainty
Starting salaries increase at slowest rate for nearly three years
Overview of Q4
The January findings from the KMPG and REC UK Report on Jobs revealed a further drop in hiring activity at the start of 2024, particularly for permanent workers which fell at a sharp rate, predominantly in the Retail, Construction, and IT & Computing sectors. However, temporary only fell slightly.
The total vacancies across the UK declined slightly again during January for the fourth time in five months. Meanwhile, temporary vacancies increased at the slowest rate since November 2020. The supply of candidates continued to increase, fuelled by lower levels of recruitment activity and redundancies, with the permanent pool rising at a slightly quicker pace than the temporary.
In February, the overall candidate availability rose for the twelfth straight month. Despite this, permanent placements continued to decline, with employers delaying or pausing hiring decisions due to economic uncertainty, according to recruiters. Temporary placements also decreased, with the steepest decline since July 2020. The Midlands was the only monitored English area to register an increase in temporary placements during February.
The latest report also indicated rates of starting pay for both permanent and temporary workers went up, especially for skilled workers, to match the higher cost of living and competition. However, the rate of pay increase was the slowest seen for nearly three years as employers try to manage tighter budgets better.
Our predictions for Q1 24/25:
Lewis Goody, Senior Recruitment Consultant
“I am noticing the market becoming more saturated with candidates across industries. There has been a considerable amount of redundancies, especially in the Shipping/Logistics sector, that has had a knock-on effect. This, combined with a reduction in available jobs (whether that be new posts or replacements) hasn’t helped either.
The power has shifted from candidate-driven over Covid to somewhat client-led. When this happens, salary rises tend to slow as there is more competition, less roles and essentially less bargaining power for job seekers.
However, it’s not all doom and gloom. Some industries are going from strength to strength, including the Sustainability sector. With government programmes aiming to complete by 2030, the push for skilled workers has become greater. Lots of these roles are staying remote too (for obvious reasons), which increases their chances of tempting job seekers from other industries.”
Victoria Butcher, Senior Recruitment Consultant
“I believe Q1 will see private sector businesses focusing on their training, development, and retention efforts. Largely in the form of developing pathways for existing employees and flexible work offerings to keep skilled employees engaged. We have seen a continuous steady stream of roles as of late, but these are moving towards more skilled based hiring and senior ‘business essential roles’ to replace. New roles and new projects seem to have taken a backseat, so no fresh new roles are available. I predict this to continue and those seeking a bold career move in more senior roles may find more roles available, but more junior talent will struggle to enter the professional workforce.”
Maeve Speed, Recruitment Consultant
“I anticipate that in Q1, the market will remain favourable for job seekers, although this trend will vary significantly by sector. Throughout Q4, across all industries we have seen numerous major companies unfortunately announce redundancies, resulting in a surplus of skilled candidates entering the job market. I foresee this trend persisting into Q1, presenting a prime opportunity for expanding businesses to grow their workforce.”
Charlotte Meara, Recruitment Consultant
“I feel that in recent years, there has been some genuine job security fear which has prompted candidates to explore the open market. However, things are off to a good start in 2024 and there is already a significant uplift in opportunities.
So, what’s my prediction for Q1? Recruitment will continue its course in the coming months, and potentially begin to lean towards more of a candidate-led market. But, truth be told – in the unpredictable world of recruitment, anything can happen!”
Information sourced from the KPMG and REC UK Report on Jobs survey, compiled by S&P Global, for January and February. The reports are compiled by S&P Global from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.
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