Jobs Outlook Report: January 2021
It’s a tale of no surprises, and that’s what we should focus on when looking at the most recent REC/KPMG Report on Jobs.
Amidst a new lockdown and stories of virus mutations and an overwhelmed health care system, it’s no surprise that January has seen the jobs market hit hard.
However, what’s important to point out is the very fact that this is not surprising and it’s not as bad as we’ve seen at multiple points over the last 12 months. The lost ground is recoverable and would appear to already be happening.
Intense headlines and interesting data
The headline of the most recent REC Report on Jobs is ‘Permanent staff recruitment falls sharply in January.’ It may be alarming, but it is unfortunately true. However, it is not unexpected. We’ve seen a notable drop in the number of permanent jobs being advertised and demand for new recruits has declined 'solidly'.
The rate of decline has been the sharpest since June 2020, but it’s not in the league of the first lockdown. Meanwhile temporary work continues to rise, as we always expect during times of difficulty and uncertainty.
What we really do have now, is a high-supply of candidates as redundancies have pushed up the numbers looking for work. This has impacted starting salaries, with dampened rates. Nonetheless, this dampening is still not as severe as we saw last year.
Let’s be positive, let’s bounce back
We can’t escape the fact that the winter has been tough for the job market. However, as I’ve said throughout the pandemic, snapshot data can be somewhat misleading because of the rate of change. That’s why we should also look to the notable positive uptick in the Jobs Recovery Tracker, which is showing the recent dip is proving to be short-lived. There were 1.77 million job adverts in December.
We also need to feel confident that the UK has immense underlying strength in terms of its job market and economy. Whilst the report may have said that 28% of employers made redundancies in the last quarter of 2020, many employers are feeling considerably optimistic at the UK’s ability to bounce back amidst a successful vaccine rollout that is, in many ways, a global trailblazer. We see this in employer’s confidence levels in hiring increasing +5 points.
Recruiters, like First, are on hand and ready to help employers move forwards. Neil Carberry from the REC is quite specific in terms of how to do this. He says: “
“We need to take action to boost the recovery - supporting businesses to retain workers and create new jobs and underpinning the transitions people will need to make. Reforming the apprenticeship levy to boost skills, reducing the cost of furlough, deferring 2020 VAT repayments and reducing the jobs tax - employers National Insurance - would all be sensible steps. The recruitment industry is ready to help.”
There is plenty of scope for optimism and plenty of opportunity for growth as we move forwards and towards the next Budget.
With a flexible approach, using temporary jobs as much as possible, and a reliance on our traditional strengths, we can feel confident in UK jobs, productivity and growth.