Recruitment Market Update 2024

Bringing you the latest industry updates regarding the temporary and permanent employment market, collecting data sourced from the Recruitment & Employment Confederation (REC), CIPD, KPMG and the Office for National Statistics (ONS). We hope you find it informative and a source of valuable information.

February 2024 Update

Welcome to your Recruitment Market Update 2024.

This month, the REC has shared its 4 key themes to improve the labour market, as part of the Spring Budget on 6th March.  The REC is requesting:  

  1. Regulating for a sustainable and dynamic labour market that supports temporary work by committing to reviewing, and reforming employment laws and taxation.
  2. To boost workforce productivity and reduce labour market inactivity in the short-term by expanding access to training, increasing childcare accessibility and reviewing public sector procurement models.
  3. Understanding the labour market and today’s workers to build a clear and effective industrial strategy, creating a long-term plan for the labour market and to tackle labour shortages.
  4. To support the labour market’s ability to transition and meet future jobs needs by embracing new technologies and meeting demand for jobs related to Net Zero ambitions and other emerging industries.
 
Recognised by the government as the voice of the employment industry, fundamental to the strength of the economy. The REC has issued a full submission – click here.

Hiring and Economic Activity

Great news as the latest data highlights 873,169 new job postings in January 2024, which is a 27.9% increase from the previous month. 

Positive growth signs regarding businesses’ prospects, as the net balance of employers’ confidence in making investment and hiring decisions increased by 4%.

Permanent vacancies fell sharply at the start of the year, while temporary requirements fell only slightly.  Starting salaries remained high in January, but the latest increase is the softest recorded since March 2021.  Temporary wage growth rises to a five-month high, however, this is below the historical trend.

Staff vacancies fell in the public sector in January, by comparison, increasing in the private sector, with the strongest increase in demand seen for short-term workers.

GDP growth is forecasted at 0.5% for 2023, followed by 0.6% growth in 2024.  Lower energy prices and economic slack are projected to reduce inflation to 5.25% by end-23 and to the 2% target by mid-25. See graph below from the Bank of England Monetary Policy Report:

Stats at a Glance

  • The estimated figure for payrolled employees for January 24 rose by 48,000 (0.2%) on the month and increased by 413,000 (1.4%) on the year to 30.4 million.
  • UK Employment rates are up on the quarter for those aged 16 and above, to 75%.
  • UK Unemployment rates have decreased in the last quarter to 3.8%.
  • The UK economic inactivity rate stands at 21.9%, largely unchanged, but above figures from a year ago; this is driven by those inactive because of long-term sick, which remains at historically high levels.
  • There were 108,000 working days lost in December 2023 because of labour disputes.  The health and social work industry showed the most loss.
  • For the three months ending December 2023, the highest employment rate estimate in the UK was in the South East (78%) and the lowest was in Wales (71.1%).
  • For the three months ending December 2023, the highest unemployment rate in the UK was in the East Midlands (5.1%) and the lowest was in Northern Ireland (2.6%).  London had a record low unemployment rate for the region of 3.8%.

Topical Question

7 out of 10 employers across the UK are still witnessing a shortage of all types of candidates for their roles.  See the survey results below when the REC asked:

How, if at all, has your attitude towards temporary agency workers, freelancers and contractors changed because of ongoing candidate shortages?

Comments from Industry Expert

CIPD’s response to a report confirming that a large number of companies have failed to meet gender pay gap reporting requirements. Charles Cotton, Senior Reward Advisor, CIPD, said:

“Pay gaps don’t mean women are paid less than men for doing the same job, but can indicate room for improvement in equality and inclusion when it comes to recruiting, managing, developing and rewarding people.”

Organisations with over 250 employees are legally required to report on their gender pay gaps every year.  The CIPD’s report has revealed that almost a fifth of large businesses did not comply with legal reporting requirements last year.   With a month to go before the pay reporting deadline, the CIPD is urging employers to remember their reporting obligations.  As well as focusing on their wider responsibility for creating a fairer, more inclusive workplace.

January 2024 Update

Stats at a glance

  • UK Employment rates have increased to 75.8% compared to the previous year.
  • UK Unemployment rates remain largely unchanged at 4.2%.
  • The number of payrolled employees rose by 1.0% compared with December 2022, a rise of 306,000 employees, according to early estimates for December 2023.
  • Early estimates for December 2023 show that median monthly pay increased by 6.6% compared with December 2022.
  • In December, there were more than 1.4 million active job posting according to the Recruitment & Employment Confederation (REC).

 

Source:  Earnings and employment from Pay As You Earn Real Time Information, UK – Office for National Statistics (ons.gov.uk)

Hiring and Economic Activity

Downturn in hiring activity eases in December. A further decline in hiring activity at the end of 2023 was reported by recruitment consultancies.  However, both permanent placements and temp billings fell at softer rates than seen in November. 

Data identified that muted demand for staff and recruitment freezes amid the weak economic climate had weighed on hiring decisions. Permanent staff appointments continued to decline at a faster pace than that seen for temp billings. 

Source: Report on Jobs: Softer decline in recruitment activity at end of 2023 :: The REC

Payrolled employee growth for November 2023 has been revised from a decrease of 13,000 to an increase of 9,000. This is due to the incorporation of additional real time information (RTI) submissions into the statistics.  This exercise takes place every publication and reduces the need for imputation.

Although the number of employees declined between February and November 2020, it is now above pre-coronavirus trends.

Source: Pay As You Earn Real Time Information from HM Revenue and Customs

Industry Data

The three largest sectors – wholesale and retail, health and social work, and education – account for around 40% of UK employees. Combined with administrative and support services; manufacturing; professional, scientific and technical; and accommodation and food service account for more than 70% of UK employees.

Source: UK Standard Industrial Classification (SIC) codes, as defined by the Office for National Statistics (ONS).

The below graph illustrates that Employee growth has been very different across sectors

Percentage change on same month in previous year, seasonally adjusted, UK, January 2017 to December 2023

Source: Pay As You Earn Real Time Information from HM Revenue and Customs

Comments from Industry Experts

REC response to ONS labour market figures, January 2024. Neil Carberry, REC Chief Executive said: 

The labour market has slowed over the past few months, but activity levels remain resilient. Vacancies are higher than pre-pandemic and unemployment, while rising, is still at a low level by historic standards. The jobs market does now seem to be in a bit of a stand off with the wider economy, with both employers and candidates waiting to see how the economy develops before committing to new roles.

“This situation means there is a premium on getting growth going by injecting confidence into businesses and workers. With pay clearly moderating – and other surveys pointing to this continuing in the Spring – and inflation falling, reducing interest rates would offer many hard-pressed businesses and workers a sign of progress.

“As the debates at Davos this week show, adapting to the changes to the labour market driven by technology and demographics will be vital to delivering sustainable, inclusive growth. But that requires people issues to be prioritised in government and by business leaders.”

Source: REC response to ONS labour market figures, January 2024: The REC

Looking to hire? We’ll call you back.

If you’re looking to hire, pop in your details and we’ll give you a callback to chat through your hiring needs in more detail.

OR

Looking to get hired? Search jobs

Signature Recruitment are delighted to announce that we are the Winner of the Heart of the City Award 2022 – Celebrating our social impact in London communities

Dragon Awards Logo

Signature Recruitment are delighted to announce that we are finalists for the 2021 Dragon Awards – Celebrating our social impact in London communities

Our website uses cookies to enhance your browsing experience. By continuing to use the site, you consent to the use of cookies for essential functionality and analytics purposes.