With the end of the year fast approaching and the festive season nearly upon us, this is usually the time we start to see a flurry of recruitment activity. Was that the case this October? In this comprehensive update, let’s delve into the key developments that shaped the recruitment industry last month.
As reported by the Office of National Statistics (ONS), the number of UK job vacancies fell for the fifteenth consecutive quarter, from July to September 2023. From April to June 2023, the number of vacancies had fallen by 4.2%, with open vacancies being reported in only 14 of the 18 UK industry sectors.
Despite a slight decrease from the historical high of 82% in Q4 2022, more than 70% of UK firms are still reporting hiring difficulties. While three-quarters of businesses continue to struggle to fill positions, hiring intentions in firms remains low, which may indicate a potential cooling of the labour market. Even previously healthy sectors such as construction, real estate, IT, and telecommunications have all experienced declines this year.
While some employers are likely to welcome the decrease in vacancies because it will relieve wage pressure, there is cause for concern as it’s a sign that the economy is slowing further. This means we may see job losses over the winter and into Q1 of 2024.
The reasons for this slowdown in hiring activity have been with us for months and show no signs of abating:
- The Bank of England’s repeated interest rate hikes have made it more expensive for businesses to borrow money, leading to a more cautious approach to hiring;
- Slowing consumer demand due to the cost of living crisis;
- Growing concerns over a potential recession are causing businesses to adopt a more conservative stance on hiring.
In adjacent news, work and visit immigration fees increased by 15% on 4 October 2023. The fee hike is expected to have a significant impact on people and businesses looking to come to or remain in the UK for employment. It could deter some potential migrants and make it more difficult for companies to recruit foreign workers, but time will tell.
So, what are the UK Government proposing to do, to stimulate the economy and counter against any further slowdown?
In his Autumn Statement, Chancellor Jeremy Hunt outlined a number of proposals, to ‘make work pay’, and to try to get 2024 to start on a more positive footing. A 2% reduction to National Insurance for employees was much welcomed, as well as a tightening up of the jobseeker benefits system, designed to encourage people off of long-term benefit payments and into work.
The Office for Budget Responsibility have down-graded UK economic growth for 2024 to 0.7%, although to counter that in some way, inflation is predicted to continue to fall to around 2.8% by this time next year.
So what does this mean for the labour market in 2024?
We predict that the market for talent will continue to remain tight next year, although we think there will be a little more availability of candidates due to some job losses in harder-hit or sluggish sections of industry. We may see further business closures next year, with company insolvencies rising by almost 10% in the 12 months since October 2022, which will likely push more jobseekers onto the labour market. Vacancy numbers across the UK will continue to be lower than pre-pandemic levels, but for those businesses who are planning to hire, there may well be more availability of candidates – something that we’ve not seen since the end of the pandemic in early 2021.
In the meantime, employers will continue to be cautious about hiring permanent members of staff, and we’ve seen increases in temporary/contract hires throughout 2022/23. Many businesses are turning to the greater flexibility and reduced costs of hiring temporary workers in the face of a sluggish economy.
TIPS for Employers to enhance your recruitment campaigns in 2024
- Plan ahead and ensure that your EVP (Employer Value Proposition), salary range and benefits are at least in line with market rates.
- Advertise across a number of online job boards if budget allows, or target specific specialist job boards for your candidates.
- Contact candidates as soon as you receive their CV’s (same or next day ideally) for an initial conversation and to engage early.
- Book interviews as soon as possible after the initial conversation – even if this is a short 20 minute Teams meeting with the relevant line manager.
- Keep waiting times between interviews to a minimum.
While the struggle to recruit staff will likely remain for many months to come, it can be mitigated by turning to professional recruitment services for employers. Why waste time and resources on lengthy recruitment drives when Plus One already has talented potential hires waiting?
Plus One has been a trusted partner in connecting companies with exceptional talent since 2005. Leveraging our extensive industry expertise and cutting-edge recruitment tools, we effectively market your company as a desirable employer, attracting both active and passive job seekers. Our comprehensive approach ensures that you find the perfect candidates to match your unique needs and propel your business forward. Contact us today and find out about our services, including our ‘100 Day Placement Promise’ on all of our permanent introductions.