Reed.co.uk’s monthly Job Market Review gives recruiters and businesses fresh insights into what happened in the jobs market last month – including candidate insights and regional and sector labour market performance.
August 2022 Snapshot
- 237,157 adverts were posted on Reed.co.uk in August, up 9% from 217,707 in July
- Applications were up in August by 2% MoM
- The sectors with the most significant increase in jobs posted included Marketing & Media (30%), IT (26%), and Financial Services (25%)
- IT, Security and Safety, and Legal applications were all up by 6% MoM
- Applications made in London were up by 6%
- Education jobs vacancies were down by -16% MoM compared to July
Is the ‘candidate’s market’ cooling down?
In August, we saw a 9% increase in the number of jobs posted on Reed.co.uk compared to July, but also a -18% decline YoY. With much talk of the post-pandemic jobs boom over the last few months, the YoY figures suggest it could be cooling off, with candidate influence waning as we move forward. That said, and despite fears of a recession, the market is stable, and growth is still happening MoM – demand for workers is still high, and jobs are still there for the taking.
So, are we heading for a recession?
If history is anything to go by, our data says no – or at least not in the same way we have experienced. In August alone, Finance, IT, Sales, and Marketing & Media have all seen an uplift in vacancy numbers, whereas previous recessions have bulldozed the economy through a lack of jobs and hiring reticence.
James Reed, Chairman of Reed.co.uk discussed this and the UK jobs market on Bloomberg’s ‘In The City’ podcast with David Merritt. With a focus on London, the market mood is uncertain, but there are signs of hope as the inflation rate eased slightly in August (from 10.1% to 9.9%), driven by the dip in fuel costs.
As we look to Wall Street and the Banking sector for indications of what moves are happening in the jobs market, there are reports that banks will be making cuts to hiring and staff by the end of the year. Goldman Sachs is already reportedly slowing down on its hiring spree, and re-introducing its annual performance reviews to monitor its talent investments and cull under-performers. In that respect, it would seem like the employee’s upper hand could be slipping, particularly in more niche areas within sectors like Banking.
So those fearing a recession will be looking to the new government to understand how they will manage the economy going forward. However, James Reed focused on the data and showed that while the jobs boom may be slowing, vacancy and application numbers are still up. While ONS data showed that pay hasn’t kept up with inflation, there is still movement in specific areas where certain skills are in high demand.
Despite reports that banks are cutting down on employee numbers, Reed.co.uk data shows a 5% increase in average salaries for the sector compared to July. This was the highest average salary spike MoM, followed by Marketing & PR which had a 3% increase. This shows that opportunities in Financial Services, IT and Marketing (digital in particular) are in high demand, and people will naturally look for more money as the cost-of-living continues to rise.
So, the data may not signal evidence of a traditional definition of a looming recession, but it is clear that there is a need for a workforce strategy to help grow the economy following the fallout from Brexit and the pandemic; to support a favourable, high-growth, low-tax (more on that later), high-wage economy.
Regionally, job vacancies were marginally higher MoM across most of the UK. However, we saw a YoY decrease in job vacancies across the South East (-11%), North West (-23%), North East (-69%), and East Midlands (-54%).
These dips are likely to be caused by the candidate shortages in Transport & Logistics in critical import and export hubs, and coastal areas that needed to capitalise on Hospitality & Catering opening back up again post-summer restrictions.
London, in contrast, thrived vacancy-wise, with a significant increase of 33% MoM and 22% YoY. It’s no surprise then that the number of jobs posted in London has also risen MoM in Financial Services (68%), IT (56%), Marketing & Media (46%), and Sales (35%). This followed unwelcome calls from the government for brands to dial back on their marketing output to counter the cost-of-living crisis.
Skills to pay the bills…
As we have seen in the past, and no doubt will continue to see, niche or skilled roles that are high in demand usually call for competitive salaries – with more businesses willing to pay a premium.
Applications were up 6% in IT MoM and 33% YoY, signalling answers to the call for specifically skilled workers and the higher salaries they attract versus last year. Applications in the Marketing & Media sector were also up 5% MoM.
In contrast, reported staff shortages are already beginning to cause a headache in the Hospitality & Catering sector with customers turning up to short-staffed venues, dealing with travel disruption, and getting a subpar experience – and in turn, taking away vital income for the sector and its existing employees.
This affects remuneration, reputation and more as potential employees look elsewhere for fear of a lack of opportunities and a disloyal, high-stress environment, potentially damaging one of the more lucrative growth opportunities for the UK economy as tourists look to spend elsewhere.
Seasonally for the Christmas recruitment drives, an uplift is likely, but also, as the cost of living continues to rise, some may be pushed into multiple jobs where the gig economy and casual Hospitality & Catering opportunities fit in well. Businesses will look again to the government for extra support to keep the sector afloat and tourists coming.
With a new government in place and an uncertain future at present, it can feel a little uneasy in the market. This feeling can be exacerbated by market talk too, with discussions around a looming recession. But, as we’ve seen and will likely do so going forward, the data doesn’t show a 2007-esque recession on the horizon.
The government will be pivotal in the coming months in how they support the workforce, businesses and economy as a whole. The energy crisis feeding into the cost-of-living emergency is, of course, front and centre, but there will be many factors that will require consideration.
Tax, for example, a vast topic for discussion and a contentious one at that, will become increasingly more prevalent in careers and jobseeker decision-making. Tax is a disincentive to go to work, even more so if it rises massively, with people losing a sizable chunk of earnings before opening the month’s gas bill.
But, on the other hand, lower taxes will not only support existing employees but also encourage people back into work, notably some of the 1million+, typically over 50s, that took retirement due to Covid.
So, what we have here are; lots of jobs in the market, decent salaries – while not matched with inflation – but varying in the increase of market averages depending on the sector, and untapped potential in non-typical talent pools of candidates. Workers who, with the right leverage and encouragement, could be brought into the workforce and support the growth of the economy. Business owners, recruiters and employers are in a prime position to play a positive role here, in making those opportunities attractive for new hires and helping to retain existing talent.