Reed.co.uk unveils 2023 labour market review: rising applications and better pay for workers, despite a challenging economy
Reed.co.uk, one of the UK’s leading jobs and careers sites, has released its year-to-date review of the labour market. Today the ONS published December’s labour market statistics- read the sector response here.
Overall, Reed’s data shows an 18 percent year-on-year (YoY) decrease in job postings compared to 2022, alongside a 29 percent YoY increase in applications – a development that has led to a more competitive labour market, driving the shift from a seller’s market to a buyer’s market.
The dip in job postings confirms that employers are slowing their hiring rate in what has been a challenging year for the economy, with inflation peaking at 6.5 percent in May. However, a strong year of applications sheds light on how jobseekers are seeking new opportunities with better salaries as pay keeps pace with inflation.
Businesses have weathered trickier market conditions this year, however, certain industries have prospered and prioritised growth. Increases in job postings were experienced across Motoring and Automotive (27 percent YoY), Energy (24 percent YoY), and Education (10 percent YoY), with top roles for each sector confirmed as Technician, Engineer, and Teacher, respectively.
Sectors witnessing the most significant declines in job postings include Social Care and Administrative, Secretarial and PA (down 35 percent and 24 percent YoY, respectively).
While most sectors experienced an increase in job applications, IT and Telecoms (+62 percent YoY) and Education (+51 percent YoY) achieved significant annual uplifts in terms of job applications received.
Pay has kept pace with rising inflation – which peaked at 10.4 percent in February and since fallen to 4.6 percent in October – instilling confidence in the labour market’s resilience to economic headwinds.
The pace of salary growth eased alongside inflation, with salary growth in March gradually slowing from a peak of 7.7 percent YoY to 5.3 percent YoY in October.
Sectors demonstrating strongest resilience with over 10 percent YoY salary growth include Retail (16.4 percent YoY), Social Care (10 percent YoY), Manufacturing (11.1 percent YoY), Health & Medicine (14 percent YoY), General Insurance (14 percent YoY), and Estate Agency (10.4 percent YoY – all above the rate of inflation.
London was the worst-performing region in terms of job postings compared to 2022. The city saw a 19 percent decrease in job postings compared to last year, yet appetite for jobs persisted as applications rose by 32 percent YoY.
The North West showed the most significant regional growth in job applications compared to 2022, with a 33 percent YoY increase.
Northern Ireland was the only region to see an increase in job postings, rising by 3 percent from 2022.
Comments from James Reed, Chairman of Reed:
“As we reflect on the year drawing to a close, our 2023 labour market review signals a noteworthy shift from a candidate-led to an employer-led market. Primarily, this shift is a reflection of the challenging economic conditions experienced in 2023.
“Still, while many sectors faced declines in job postings, there were some notable exceptions, and this highlights the adaptability and resilience within certain industries despite the overall market challenges.
“Looking ahead to 2024, we anticipate this trend of an employer-led market to persist, with a sustained focus on strategic hiring decisions and talent acquisition. A rise in applications across the board is indicative of the richness of talent available to employers, making it a good time for them to take advantage of this and bolster their workforce.
“Based on current economic forecasts, we don’t foresee another major turn in the labour market. Although, the Bank of England’s anticipation of slowing inflation provides a positive outlook for wages.
“The past three years have deviated from the norm and the pendulum swing we’re experiencing is part of the market’s response to these seismic changes – but employers and jobseekers alike have reason to maintain a sense of confidence as we head into next year.”