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 labour market performance by sector and region.
May 2023 snapshot
- 193,946 jobs were posted on Reed.co.uk in May, up 10% compared to April
- Applications increased month-on-month (MoM) by 5%, and year-on-year (YoY) by 30%
- There was an increase in the number of jobs posted in the Transport & Logistics, Education and Legal sectors – up 29%, 24% and 16% respectively
- Applications for roles in the North West of England were up 38% compared to May 2022
The job market is heating up
The labour market is set to become even more competitive in the coming months. With interest rates rising in a bid to bring down the inflation rate, businesses are hiring with caution – which has led to a decrease in the number of vacancies. The Office for National Statistics (ONS) reported a fall of 79,000 vacancies between March to May, and our data tells a similar story. Jobs posted on Reed.co.uk were down 11% in May compared to February this year.
As the year goes on, there are fewer available roles, and more candidates hoping to secure them. Employees are becoming restless in the face of the cost of living crisis and an increasing number of people are looking to change jobs in the next six months, in particular those based in London. On top of this, the market is seeing inactive workers forced back into the workforce due to the financial crisis.
While there are still jobs for the taking, and certain industries in particular are calling out for staff, such as Transport & Logistics, Health & Social Care and Hospitality & Catering, it looks like the balance of power might be shifting – with candidates no longer holding all the cards.
With that said, some employers are likely to be apprehensive about what’ll happen when vacancies start to rise again. Will there be a mass exodus of staff? Or will efforts to meet employee wage and benefits demands help to retain their workforce? We’ll keep you updated.
Is UK economic growth stunted by the level of inactive workers?
The shortage of workers has been a prominent headline in economic and recruitment news recently, and rightly so. As mentioned, industries such as Hospitality & Catering are in desperate need of staff, and the UK is experiencing a skills shortage of engineers, scientists, architects and more.
During the pandemic, many workers either left their roles, or were let go by their employers, and they’ve never returned. In fact, economists report that one of the main reasons that the UK economy is not doing as well as other developed countries is due to the lack of workers – so much so that getting people back to work was one of the main pillars of the Spring Budget.
But, one roadblock is the number of people not working in the UK due to ill health. This is now at a record high with more than 2.5 million people out of work due to poor health. The latest ONS figures cited mental health issues among younger people, back and neck pain stemming from working from home, and the effects of Long Covid as explanations for these record numbers.
On a more positive note, the government has plans to combat this problem and get more disabled people and people with health conditions back into work. Solutions range from permitting people to keep their disability benefits while they have a job, to a programme that matches disabled individuals with existing vacancies, and scrapping the Work Capability Assessment.
The effects of the Coronation celebrations
May 2023 will go down in history as the month that a new King was crowned. King Charles III took to the throne on 6 May and with that came an additional bank holiday – two big events that caused waves for the UK economy.
Royal events are a blessing for the UK Tourism industry, with many travelling from far and wide to be a part of the events. Businesses in the Hospitality and Leisure industries will have no doubt benefited from the additional tourist footfall and the extra days holiday.
Greene King boss, Nick Mackenzie, was looking forward to the bumper bank holiday and the soaring sales it was predicted to bring in for the pub chain. He estimated that his pubs would pull over 1.8 million pints over the weekend as many joined in on the celebrations.
But, while many workers were excited to soak up the celebrations and enjoy an additional public holiday, businesses were not all so enthusiastic. Companies often see a loss of turnover on bank holidays – which will have been exasperated in May considering the additional holiday for the Coronation.
Business consultant Abby Ghafoor predicted that businesses would see a decrease in workplace productivity in May as employees look to take advantage of the extra holiday and take extended periods of annual leave.
On top of this, irregular bank holidays are a problem for the economy. GDP fell significantly in both June and September last year – the months that marked the Queen’s Platinum Jubilee and the Queen’s death. At a time when the UK economy is already struggling, it’s unlikely that everyone met the additional holiday with open arms.
The growing presence of Artificial Intelligence in the jobs market
Artificial Intelligence (AI) has taken the world by storm over the past year, and it’s come a long way since the days of Microsoft’s virtual assistant, Clippy. With AI’s skills in writing, problem solving, and coding, businesses are making the moves to replace human workers with technologies. Among these businesses are Telecoms giant, BT which is set to shed 55,000 jobs by the end of the decade. The company will rely on AI to efficiently serve their customers, and therefore, will need fewer people.
Is the need for engineers dwindling? The number of jobs posted for this sector is down 14% year-on-year, but applications are up 52% compared to May 2022. In previous Job Market Reviews we’ve explored the redundancies within the Technology industry but now Engineering redundancies may also be on the horizon.
Engineers will also fall victim to the previously mentioned BT cuts as the company’s expansion of its fibre networks draws to a close and they move away from copper. Additionally, Ford announced that 2,800 engineering jobs are on the line as part of the business’s goal to have an electric-only fleat in Europe by 2025. So while AI may bring many positives to businesses, some roles may also be at stake.
But there is hope for the sector, as some businesses within Engineering are thriving. Forth Engineering, a Cumbria-based business that works to deliver innovative solutions across a range of industries, is currently looking to expand, with exciting new projects in the pipeline and many open positions for the taking.
The Manchester Baccalaureate – a new style of technical education
There’s a strong argument that to solve the country’s skills gap, the government needs to target those in education in order to set them on the path for success. In 2020 the government launched T-Levels – a technical qualification equivalent to A-Levels where students benefit from a combination of education and on-the-job training. Students can do T-Levels in Education, Digital Services, Agriculture, and much more – the list grows every year!
But, Andy Burnham, Mayor of Manchester, is taking it one step further. He has pitched the Manchester Baccalaureate (MBacc) in response to the two-thirds of young-people leaving school without GCSEs in Maths, English, or Science. It’s a less academic-focussed educational route but aims to get students to the same destination. The aim of this new programme would be to help fill the skills gap, and break down the barriers to education and work that young people from working-class backgrounds face. But, if the job security and salary don’t match the professions that need a degree, the scheme could be a ‘dead end’.
However, there are concerns from the government that this type of programme could undermine the progress they have made with T-levels and narrow the opportunities out there for young people.
Looking forward…
Looking ahead, the summer months and school holidays may lead to a slight easing in the job market before it bounces back in September. Teachers’ strikes and pay debates could impact the education sector, potentially affecting job vacancies and leading to school closures.
Businesses, cautious due to rising interest rates and inflation concerns, may engage in more selective hiring, increasing competition for jobseekers. However, government initiatives to boost the creative industries offer potential for new job opportunities and economic growth.
Despite the uncertain financial climate, businesses may still invest in top talent to maintain a competitive edge, leading to potential hiring activity for skilled professionals. In the engineering and technology sectors, recent redundancies may result in increased job applications as individuals seek new employment prospects.
Overall, the job market may experience fluctuations in the coming months, influenced by ongoing strikes, government initiatives, economic conditions, and industry-specific factors. But, now is the perfect time to attract top talent to your organisation. As more people look to change roles or re-enter the workforce, businesses can have their pick of the talented and skilled professionals looking for new opportunities – and who better to help you find that talent than Reed.co.uk?
