Labour Market Recovers as Lockdown Restrictions Ease

New research has shown that, over the month of March, hiring activity has substantially improved. The labour market showing signs of recovery is thought to be a result of lockdown restrictions easing, seeing many sectors re-open. 

The KPMG and REC ‘UK Report on Jobs’ has shown that there has been a significant improvement in recruitment activity over the previous month (March 2021),

This has been attributed to the rapid vaccine-roll out and the anticipation of COVID-19 restrictions being lifted over the following months.

As such, the number of vacancies expanded at its quickest pace in three years, since August 2018.

In addition to this, the growth in permanent placements almost hit a six-year high, reaching a growth rate of 59.2. Temporary billings expanded at the quickest rate since November 2017, signalling a sizeable recovery in the labour market as companies expect normal business conditions to return.

In response to this, demand for workers has also grown, increasing rapidly by the end of March. This has led to improved pay trends with starting salaries rising for the first time in 2021. Temporary wages also increased for the first time in three months, with the rate of inflation the quickest seen since December 2019.

Overall, it was the Midlands which saw the largest rise in vacancies whilst London saw the least.

Neil Carberry, Chief Executive of the REC, said:

For months, we have been talking about the potential recruiters saw for a recovery in hiring as we got on with vaccinations and the lockdown did its work. Today’s data shows that even during lockdown, our labour market was bouncing back. The strong temporary recruitment trend of the past few months has been maintained, but with a new addition – the fastest increase in permanent job placements since 2015. Taken together with a long-awaited recovery in hiring in London, this is a sign that business confidence is starting to flow back, even at this early stage of unlocking.

As companies start to recruit, they will need to appreciate that the labour market is still suffering from all sorts of shortages. So reviewing their hiring practices and doing things in the best way possible will matter more than ever. Inclusive hiring is not a tick-box exercise – it’s about finding the best candidate for the job no matter who they are, to help your business succeed.

Claire Warnes, Partner and Head of Education, Skills and Productivity at KPMG UK, emphasised the need for companies to focus on their skills gap:

This is good news for businesses, job seekers and the UK economy, but employers are still identifying a big skills gap across sectors including IT, construction and retail, with demand and supply not matching up.

That’s why as we start to look beyond the pandemic, businesses will be even more crucial in making sure prospective and current employees are adaptable, productive and ready for new challenges.

Employers prioritise leadership & digital skills for 2021

Leadership skills including Coaching, Onboarding and Decision Making top the list of most sought-after skills employers are looking for in new recruits, according to job search engine Adzuna.

The study analysed over 600,000 UK job ads advertised in 2020 and just under 150,000 jobseeker CVs to compare the skills sought after by employers with the skills shown by jobseekers, revealing the skills growing in demand and current skills gaps.

With many industries still working remotely, employers are placing greater emphasis on Coaching, Onboarding and Decision Making skills compared to a year ago, as hiring and leading teams through the pandemic is a particular focus. Coaching skills were referenced in 3.7% of job ads in 2020, up from 3.3% in 2019. Onboarding is second, referenced in 0.7% of job ads in 2020, up from 0.4%, as the rise in remote working has driven a need for more onboarding specialists. Decision Making is fourth, cited in 1.5% of job ads, up from 1.3%.

Commenting on the research, Andrew Hunter, co-founder of Adzuna, said: “Leadership skills such as onboarding and decision-making have grown in demand as employers seek experienced staff to help them navigate through the Covid-19 crisis. That’s also borne out in job vacancies, where openings for more experienced staff have recovered more quickly than those for entry level positions.

This sharpened focus on skilled staff is also seen in job vacancy numbers. Overall, advertised UK vacancies are down 35.8% compared to a year ago, but entry-level graduate vacancies are down 61.0% year-on-year. There are just over 8,000 advertised graduate vacancies currently available, compared to over 22,000 of the highest-paid roles with advertised salaries over £70,000, typically suitable for more experienced jobseekers.

Data demand

Jobseekers with Digital Marketing skills and GDPR knowledge are also in growing demand as employers focus on harnessing the power of the internet, rather than bricks and mortar stores and offices, to reach their customers. Digital Marketing was cited on 1.0% of all job ads in 2020, up from 0.9% in 2019, yet just 5% of jobseekers mention the skill on their CV. Similarly, GDPR featured in 1.1% of job ads in 2020, up from 1.0% in 2019, with 4.3% of jobseekers citing the skill on their CV.

There is a significant skills gap within the Tech industry across the UK. There are over 81,700 IT jobs currently on offer in the UK, accounting for 8.3% of total hiring. However, IT skills are only mentioned in 6.8% of UK CVs. This has increased slightly from 6.10% in 2019, but it still highlights a notable gap in an industry that boasts an average salary of £53,518 (45.0% above the national average of £36,903).

Many specific tech skills are also growing in demand among employers. Programming language Python was cited in 1.6% of job ads in 2020, up from 1.5% in 2019. This is also the most common coding language referenced on jobseekers CVs, found in 6.9%, compared to the 5.6% of jobseekers referencing Java, and just 0.5% mentioning Perl. 4,479 job ads overall require Coding skills.

Cyber Security, AI and Machine Learning are three more skills growing in demand. Cyber Security was cited in 0.6% of job ads in 2020, up from 0.5% in 2019, with 1.7% of jobseekers currently referencing this skill on their CV. Meanwhile, AI and Machine Learning are cited by 0.5% and 0.6% of job ads respectively.

By contrast, the skills gap within Digital has decreased year-on-year. There are 45,800 Digital jobs across the UK, equal to 14.8% of all vacancies. However, the number of jobseekers showcasing digital skills on their CV has increased year-on-year from 16.7% to 19.3%, closing the skills gap in this sector.

Lingual boost

French is the most sought after language in the UK job market, with 2,908 active vacancies looking for French speakers in the UK. German is the 2nd most in-demand language with 2,457 active job vacancies, while Spanish rounds out the top 3 with 1,704 open job vacancies. French is the most common second language with 12.1% of CV’s referencing French as a skill or qualification. In comparison 9.6% of CVs reference Spanish, 6.0% cite German and 5.6% reference Italian. There is a notable opportunity for Mandarin speakers with only 1% referencing the language and 893 open opportunities for Mandarin speakers.

Cited by just 3.2% of jobseekers on their CV, Arabic is becoming more sought-after by employers, with 0.13% of job ads referencing the language in 2020, up from 0.10% in 2019. Similarly, Sign Language was referenced in 0.08% of job ads in 2020, up from 0.06% in 2019, with 984 jobseekers citing BSL on their CV in 2020 and 300 citing ASL.

Stagnating real wages means moving job the best way to secure a pay rise

A recent Recruitment & Employment Confederation (REC) press release illustrated the issue relating to Real wages. For the sixth consecutive month, wages continue to fall, according to today’s labour market statistics published by the Office for National Statistics (ONS). The release also shows that employment reached 32.1 million in the three months to August. It also shows that unemployment fell further, to 1.44 million, but vacancies increased meaning the ratio of job seekers to available jobs fell to 1.9, equal lowest since records began in 2001. Commenting, Recruitment & Employment Confederation chief executive Kevin Green says:

“The creation of more jobs despite business uncertainty is a testament to the determination and positive attitude of British employers to build and grow in the face of economic challenges.  From a job seeker’s point of view though, the continued squeeze on wages means there is little room for full-throttle celebration.

“Recruiters tell us that due to the diminishing pool of available candidates, employers are willing to offer higher salaries or hourly pay rates when advertising for new hires, meaning the best way to secure an above-inflation pay rise might well be to move jobs.

“Businesses can only grow if they have access to the people and skills they need. As the supply of available workers decreases, exacerbated by a declining rate of net migration, it is essential that the government does all it can to support employers. That means urgent clarity on the details of any post-Brexit transition period, confirmation that EU nationals currently working in the UK can stay and rapid development of a sustainable, agile, evidence-based immigration system that will support the economy.”

 

CEO or Sporting Group International, Adrian Wright commented “the stagnation of wages in the UK is a serious issue for our economy. The decline in growth will certainly inhibit the development and drive of employees. If people do not feel they are being rewarded for their efforts and responsibilities, naturally the consideration of making a job move will be on agenda if wages cannot meet the demands of the increased cost of living”.