UK labour market statistics: October 2018 & Regional labour market statistics in the UK: October 2018
Permanent hiring up
Professional recruitment firms reported that the number of candidates securing permanent roles in September 2018 increased by 9% year-on-year, according to new survey data from the Association of Professional Staffing Companies (APSCo).
Much of this overall strength can be attributed to a significant 49% year-on-year increase in permanent placements within the IT sector. While there was also a slight increase in hiring activity within financial services - where placements rose by 3% - engineering and marketing both recorded dips, with placements decreasing by 3% and 10% respectively.
Demand for talent stumbles
Despite relatively strong hiring activity in September 2018, demand for both permanent talent and contingent workers dipped year-on-year, indicating that the recruitment market may experience a slowdown in the coming months.
Vacancies for contractors slipped by 5% in September 2018, while demand for permanent professionals dipped 2% during the same period.
Despite this overall decline in demand, APSCo’s data does reveal pockets of positivity, most notably within the financial services sector, where vacancies for contractors jumped 20%.
Contract market remains slow
While permanent placements increased 9% in the year to September 2018, the number of contractors out on assignment dipped by 12% during the same period. Use of contingent workers fell across every one of APSCo’s core sectors, with the exception of financial services where contractor levels increased by 7% year-on-year.
Average salaries stable
APSCo’s figures also reveal that median salaries across all professional sectors remained largely flat in September 2018, dipping by 0.6% across the board. However, there are notable fluctuations in terms of sector, with insurance and accountancy recording uplifts of 6.5% and 2.4% respectively.
Ann Swain, Chief Executive of APSCo comments:
“While permanent hiring remains strong for now, the horizon is packed with uncertainties which have the potential to flip hiring sentiment in an instant – which most certainly explains why vacancy numbers have stalled across the board. It seems that businesses are pressing ‘pause’ on hiring until there is greater clarity around not only Britain’s trading relationship with the EU post-Brexit and future migration policy, but also what the upcoming Budget will bring in terms of tax legislation.”
“With GDP growth already flatlining, and reports that the UK economy is heading for its worst year since the global financial crisis, it is no wonder that organisations may be hesitant to grow permanent headcount at present. Furthermore, suggestions that changes to off-payroll working to the public sector may be extended to the private sector as early as April 2019 could have the potential to hamper access to the flexible workforces that businesses need to bridge the gap at this uncertain time.”
“At present, demand for talent within financial services remains resilient. However, with the UK government now admitting that it expects thousands of financial services jobs to move to the European Union by the time of the UK's exit from the EU, there are question marks around how long this hiring activity will last.”
“Ultimately, future hiring activity will pivot on factors which are largely out of our control, and the professional recruitment sector must be agile to adapt to rapid changes in demand.”
Adam Pode, Staffing Industry Analysts’ Director of Research EMEA and APAC commented:
“There are two significant challenges that the industry needs to deal with. Finding sufficient candidates both internally and externally: and, planning for an unclear Brexit. Faced with uncertainty, the data from both our survey as well as Innovantage seems to indicate that some employers are putting their plans on hold at the moment.”
ONS head of labour market David Freeman said:
“People’s regular monthly wage packets grew at their strongest rate in almost a decade but, allowing for inflation, the growth was much more subdued.
“The number of people in work remained at a near record high, while the unemployment rate was at its lowest since the mid 1970s.
“However, there was a notable uptick in the number of people who were neither working nor looking for a job, particularly among students.”