There continues to be a labour shortage in the UK market, and, while job vacancies have fallen for the ninth consecutive three-month period, they still remain very high.
Unemployment is very low, but there are still a vast number of people who are economically inactive, and this fact – in-part – underpinned Jeremy Hunt’s Spring Budget a few weeks ago, aiming to ‘get Britain back into work’.
So what are the recruitment and employment trends in 2023 so far, and will they continue?
Vacancies and Employment
The statistical overview: 
- Employment rate – 75.8%
- Unemployment rate – 3.8%
- Job vacancies – 1,105,000
- Growth in average pay – 5.9%
- Economic Inactivity rate – 21.1%
*Sourced from Office for National Statistics (ONS), Labour Market Overview, UK: April 2023. Figures taken for December 2022 – February 2023.
Breakdown
In their April 2023 ‘Labour Market Watch’, the Office for National Statistics (ONS) noted that the number of job vacancies posted from January 2023 – March 2023 fell by 47,000 compared to the previous 3-month period, representing a ninth consecutive 3-month period where vacancies fell.
The fall can be attributed to some employer uncertainty due to the country’s current economic climate, especially in sectors and areas affected hardest – with them resultantly hesitant to commit to taking new staff on. However, this does not tell the whole story. The latest recorded statistics shared by the ONS showed that job vacancies remained high at 1,105,000 for January-March 2023. This shows that many employers are still showing a willingness to hire in this economic climate.
Interestingly, comparing the three-month periods from October – December 2022 and November 2022 – January 2023, there has been an increase in temporary workers and a decrease in full-time workers. Q4 2022 also saw a rise in temporary staff due to increases in certain sectors from seasonal demand.
This, perhaps, reinforces the suggestion that in a period of economic uncertainty, some employers’ increasing risk aversion is underpinning their recruitment choices this year.
Ultimately, the employment market trends from this year so far have shown that there is still a labour shortage. Vacancies are high, and there aren’t enough skilled workers to fill them.
With that in mind, it can be easy to understand why many employers may be at a crossroads with their recruitment strategy in this period. So, what can employers do to assist recruitment in a labour shortage as an employer?
- Provide flexible working conditions where possible –
- This is excellent for candidate attraction. Not only is this high up on the list of priorities for many workers in the current recruitment market, offering flexibility is more likely to see your job opportunities appeal to a wider range of candidates.
- Increase the salary where possible and disclose it on the job listing –
- With wage pressures continuing to be high due to rising inflation levels, salary is more important than ever to many candidates, and is vital in attracting them to a role.
- Refine your recruitment processes –
- If your recruitment process is unnecessarily long or complicated, or doesn’t align with the skills required, this can lead to candidates ‘ghosting’ employers during the process itself, even if they were initially attracted to the role.
- Utilise recruitment companies –
- Ultimately, using a recruitment company will provide a great advantage to recruiting during a labour shortage – recruitment agencies have greater access to candidate pools and existing candidate lists. The in-depth knowledge of a recruitment business also means we can help you by easily adapting to candidate attraction avenues relevant to the candidate in the current climate, helping to nurture the candidate journey. Additionally, the relief of taking the pressure of recruiting away from your teams, leaves them free to concentrate on continuing those tasks that directly contribute to your bottom line.
Clearly, the issue for businesses is that if they can’t find new workers, their output and productivity is lower, and they are struggling to see growth. In turn, the UK economy’s growth suffers also.
Certainly, this fact – in-part – underpinned part of Jeremy Hunt’s Spring Budget in March, where he detailed his plans to get ‘Britain back into work’.
Spring Budget: 15 March 2023
Jeremy Hunt’s March 2023 Spring Budget outlined a number of changes to help boost the labour market:
- Additional £63 million of funding for ‘returnerships’, making support and skills-development more accessible to over-50 candidates, helping to assist them back to work
- Immigration rules to be relaxed for five roles in the construction sector, to ease labour shortages
- Tougher requirements to look for work and increased job support for lead child carers on universal credit
- 30 hours of free childcare for working parents in England expanded to cover one and two-year olds, to be rolled out in stages from April 2024
- £600 “incentive payments” for those becoming childminders, and relaxed rules in England to let childminders look after more children
These announcements, while promising on the surface, do not have immediate benefits to boosting the labour market. The staggered release of these changes, such as the 30 hours of free childcare not being rolled out until April 2024 at the earliest, means that the intended benefits behind the changes may not come to be realised for a while. And, with the next general election likely happening by December 2024 at the latest, some of these changes may not even come into effect at all.
Nevertheless, these changes represent a promising desire from the government to help boost the labour market and reduce economic inactivity.
Looking to Q3 and beyond
The employment and recruitment market for the rest of the year is likely to continue to be dictated by the macro-economic situation that affects the country and the employers within it.
Economic impacts have been somewhat more forgiving than predicted prior to the start of the year, but the future remains uncertain. And, it is this uncertainty that underpins apprehension in the recruitment market, from both employers and candidates.
As employers and recruitment companies, such as Siamo Recruitment, look to the future, it is important to stay in-tune with the economic situation to ensure that, together with recruitment partners, the right recruitment offering can be created, promoted, and then effectively realised.
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