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As we transition into Q3, three standout trends are shaping the recruitment market following the close of Q2.
In our latest recruitment market outlook, we highlight the key insights from Q2, offer an overview of the current market landscape, and share expert perspectives from our senior consultants, Lewis Goody and Victoria Butcher, on emerging trends and expectations for Q3 and beyond.
Read on to find out the latest recruitment market insights.
Key Takeaways From Q2
Temporary and permanent placements decline
Continued rise in general candidate availability
Permanent salaries increase
Recruitment Market Overview of Q2
Permanent placements continued to decline throughout Q2, with a reported increase in redundancies as seen by recruitment consultants. This coincided with temporary placements, which also saw a slight fall as companies chose not to renew or replace expiring temporary contracts.
Despite a sustained rise in general candidate availability from July to September, permanent salaries continued to as companies sought out suitable candidates, which remained challenging in some cases. Temporary pay also rose, albeit the weakest rise in over three-and-a-half-years.
Q3 Recruitment Market Outlook
Lewis Goody, Senior Recruitment Consultant
“Every HR team we are working with are talking about one thing, the new Employment Rights Bill. How and what this effects, nobody is completely sure yet, but zero hours contracts being a thing of a past will certainly shake things up.
Going into a period of often high levels of recruitment with uncertainty isn’t helping job seekers, nor the organisations they could work for. Without knowing the extent of the change, it’s difficult for businesses to budget and amend sourcing plans to suit later business need.
There are plenty of job seekers, largely due to redundancies, but reform combined with dwindling budgets doesn’t give hope to employed future candidates to risk making the move.
Businesses are using other engagement types more frequently, such as fixed-term contracts, to mitigate long-term risk to future budgets. This does also give candidates the opportunity of some fixed stability, but isn’t a long term solution. FTC’s tend to struggle when in replacement of an interim.
Overall, there are signs of life yet in the job market, but most of these plans are being pushed into Q4.”
Victoria Butcher, Senior Recruitment Consultant
“We are observing a nationwide trend in the UK of an increasing number of candidates and fewer job vacancies. However, this has not resulted in an abundance of suitable applicants for many companies. We find ourselves at an interesting crossroads, which I anticipate will continue through Q3 and beyond—where the job market is stuck in a state of limbo. Many candidates are in the market due to redundancy or feeling underpaid by their current employers. As a result, when they apply for available roles, they often find that their expectations are not being met. This is likely due to companies tightening budgets, lowering salaries, and reducing work-from-home (WFH) options.
While there are candidates and vacancies, they are not aligning well in the current market. Candidates, however, are remaining resilient and holding out for roles that meet their expectations, especially in terms of compensation. This marks a departure from previous candidate-led markets, where people were more willing to accept lower offers. The demand for hybrid working arrangements remains a top priority, with a recent Forbes poll showing that 78% of individuals believe that hybrid working improves both their mental and physical wellbeing and enhances their productivity.
I would encourage employers to reconsider their benefits and offerings, particularly the potential for hybrid work, in order to become more competitive and attractive to top talent. As we move forward into Q3, I predict this trend will continue, but we may see a gradual increase in vacancies as the market stabilizes. That said, candidates may be more reluctant to move unless they are genuinely dissatisfied, which could create challenges in sourcing top talent through traditional headhunting methods.”
Information sourced from the KPMG and REC UK Report on Jobs survey, compiled by S&P Global, for July, August, and September. 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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