Review of the UK Jobs Market – April
Welcome to our Review of the UK Jobs Market for April 2023. Each month, we share market insight on the state of the UK jobs market.
You can either read our short blog, or see our infographic.
The main findings were:
- Temp billings growth quickens, but permanent staff appointment fall again
- Supply of workers improves for second month running
- Stronger increase in starting pay
- Vacancy growth slips to a three-month low
Steepest decline in permanent placements since January 2021
Permanent placements have now fallen in each of the past seven months, with the latest reduction the sharpest since January 2021. Weaker economic conditions and rising costs had led to recruitment freezes and delayed decision-making regarding staff hiring. Also, shortages of suitably-skilled candidates had impacted on the ability to fill permanent positions.
Quickest expansion in temp billings for seven months
Billings received from the employment of short-term staff increased again in April, stretching the current sequence of growth to 33 months. Notably the rate of expansion picked up for the second straight month and was the quickest since last September. This had been linked to a preference for short-term staff over permanent workers due to lingering uncertainty.
Vacancy growth edges down to three-month low
April data pointed to an accelerated rise in temp vacancies. Demand for permanent workers also rose markedly, though the rate of vacancy growth edged down to a three-month low.
At 1,105,000 the total number of vacancies fell by 46,000 compared to the final quarter of 2022, to reach the lowest figure since the three months to August 2021. Nevertheless, this was still just over a third higher than the number of open roles recorded just before the onset of the pandemic (826,000).
Labour supply expands for second month in a row
The availability of staff for permanent positions across the UK increased for the second month in a row in April. Though modest, the rate of improvement was slightly faster than that seen in March and the best recorded since January 2021. Higher permanent labour supply was commonly linked to an increase in job seekers due to redundancies and reduced hiring activity. Also, some people were more willing to apply for new roles to secure higher pay amid the rising cost of living.
After rising for the first time in just over two years in March, April saw further improvement in temp staff supply. This was due to redundancies, weaker-than -anticipated demand, and a preference among candidates for permanent roles.
Starting salary inflation ticks up to four-month high
As has been the case since March 2021, average starting salaries for UK workers increased during April. Increased competition to attract and secure suitably-skilled staff and the rising cost of living were cited as key drivers of salary inflation in April. The North of England recorded the quickest increase, though sharp rates of growth were also seen elsewhere.
The rate of temporary wage inflation ticked up to the sharpest seen since January. Whether higher average hourly rates were registered, this was linked to the higher cost of living and shortage of skilled workers. Temp pay rates increased across all four regions during April, with the North of England posting the quickest rate of inflation.
Source: KPMG and REC UK Report on Jobs 11h May 2023
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