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UK hiring rebounding at fastest rate since 2015

Saleha Riaz
·4-min read
UK prime minister Boris Johnson walks past a Job Centre Plus in Truro, Cornwall, England during his visit to the region on 7 April. Photo: Justin Tallis/WPA Pool/Getty Images
UK prime minister Boris Johnson walks past a Job Centre Plus in Truro, Cornwall, England during his visit to the region on 7 April. Photo: Justin Tallis/WPA Pool/Getty Images

March saw the sharpest rise in permanent job placements for nearly six years, new data has revealed, as businesses prepare to open according to the government’s roadmap out of lockdown.

KPMG and the Recruitment & Employment Confederation’s (REC) 'UK Report on Jobs' survey found that “the UK government’s plan to ease lockdown measures to return to more normal business operations in the months ahead and vaccine progress led to a marked improvement in recruitment activity in March.”

Temp billings grew at the quickest rate since November 2017.

The report was compiled by IHS Markit from responses to questionnaires sent to around 400 UK recruitment and employment consultancies.

“The anticipated upturn in activity once COVID-19 restrictions are eased drove the quickest increase in overall vacancies since August 2018,” it noted.

After rising only slightly in February, demand for workers grew rapidly at the end of the first quarter. The rate of expansion was the steepest seen for just over two-and-a-half years, driven by marked increases in both permanent and temporary vacancies.

April 2020 saw a major slump in both permanent placements and temp billings. Chart: REC
April 2020 saw a major slump in both permanent placements and temp billings. Chart: REC

REC chief Neil Carberry, said: "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."

Stronger demand for staff also lead to improved pay trends in March. Starting salaries rose for the first time in 2021 to date and at a sharp rate. Temp wages increased for the first time in three months, with the rate of inflation the quickest seen since December 2019. 

The overall availability of candidates was broadly unchanged for the second month in a row in March. While there were still a number of reports that redundancies stemming from the pandemic had driven up labour supply, this impact was largely offset by people who were reluctant to pursue new roles amid fears over job security, the report noted.

In the private sector, permanent vacancies increased at the sharpest rate for 32 months, while growth of short-term positions hit the highest since September 2018. 

Public sector vacancy growth was subdued in comparison, despite both permanent and temporary roles rising solidly overall.

Nine of the 10 monitored job categories recorded an increase in permanent staff vacancies in March. The steepest rates of expansion were seen in nursing/medical/care and IT & computing.

Retail, which has taken a major hit during the pandemic, was the only sector to register a decline.

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READ MORE: Nearly 190,000 jobs lost on UK high streets since first COVID lockdown

“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," said Carberry.

The Office for National Statistics said earlier that the jobless rate was 5% in the three months to January, down from 5.1% in December. Economists had expected the rate to tick up to 5.2%.

"The pandemic has led to an unprecedented rise in job losses, but with continued support from the furlough scheme and the economy now gradually reopening, worst case scenarios are now slowly coming off the table," Tej Parikh, chief economist at the Institute of Directors had said at the time.

As per prime minister Boris Johnson's roadmap out of lockdown, retailers and outdoor hospitality venues may reopen from 12 April in England.

Indoor door hospitality venues such as restaurants, pubs, cafes and bars will have to wait until at least 17 May to see restrictions lifted and the government hopes to remove "all legal limits on social contact" including weddings, live events and nightclubs from 21 June, potentially using testing to limit infections.

The majority of UK businesses support the government's pace of easing of lockdown restrictions. Recent Lloyds Bank Commercial Banking research found that two-thirds of businesses are ready to operate at close to full capacity when COVID-19 restrictions are lifted on 12 April.

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