Further to our previous article, the latest statistics from the Office for National Statistics (ONS) and the Recruitment & Employment Confederation (REC) / Lightcast Labour Market Tracker, highlight that there has been a significant decline in the recruitment market in terms of job vacancies and adverts.
Recruitment Market: Latest Statistics
The latest statistics from the ONS show that there were 1,266,000 job vacancies in August 2022, down 8,400 from the previous month, and down 52,000 from the record peak of 1,318,000 reached back in March 2022.
Labour Market Tracker
The evidence of a decline in the recruitment market is also backed up by new data from the REC / Lightcast Labour Market Tracker, which show that the number of new jobs being advertised in the week to the 25th September 2022 was 143,000, with a total of 1.45 million active job adverts. The number of new job adverts is down 8.3% in a month, and is at the lowest level since April 2022. The level of new job adverts peaked at a record level of 234,203 during the week ending the 13thb March 2022, whilst the total number of active adverts peaked at a record 1,855,325 during the week ending the 24th July 2022.
Vacancies Exceed The Number Of People Available To Fill Them
As recently as May 2022, the problem with labour shortages had become so acute, that the number of job vacancies within the recruitment market exceeded the number of people available to fill them for the first time ever. The ONS report for May 2022 revealed that the number of job vacancies stood at 1,295,000. However, the number of people who were available to fill those positions, the unemployed, had fallen to 1,257,000. That mean’t that the number of job vacancies exceeded the number of unemployed by 38,000.
Nevertheless, whilst the number of job vacancies in the recruitment market has fallen to 1,266,000, unemployment has fallen even faster according to the most recent ONS statistics. With unemployment now at 1,224,000, the amount by which job vacancies exceeds the number of people to fill them (i.e. the unemployed) has increased since May 2022, from 38,000 to 42,000.
Expansion Of Shortage Occupation List
In order to address the aforementioned recruitment market issues and ease the problems with labour shortages, the Government under the new Prime Minister, Liz Truss, is intending to relax the immigration rules via a review of the shortage occupation list. The review is likely to lead to an expansion of the shortage occupation list to make easier for businesses to recruit oversees workers to fill those job vacancies that have been most difficult to fill
The Government hopes that by resolving the problem with labour shoratges and the recruitment market quickly, it will boost economic growth, which is the Governments number one priority. A spokesperson for the Government stated: "We need to put measures in place so that we have the right skills that the economy, including the rural economy, needs to stimulate growth. That will involve increasing numbers in some areas and decreasing them in others. As the prime minister has made clear, we also want to see people who are economically inactive get back into work.”
Reaction
Commenting upon the latest recruitment market statistics, the Chief Executive of the REC, Neil Carberry, states: "Weekly jobs postings have returned to levels last seen in April this year. Employer demand is still significant, but a cooling-off is no surprise. With inflation high, and employers concerned about the economic picture, some moderation in hiring from the sugar rush of the past year was predictable. That said, we are entering a new phase in our labour market. Workforce shortages make the impact of a slowdown on hiring much more unpredictable. It is far less likely that we will see much higher candidate availability, especially for roles requiring key skills, even if the economy slows."
Carberry adds: “For businesses, working with skilled recruiters to adapt their offer to this market is essential. Changes to IR35 rules announced last week will help with bringing more labour on stream – but Government also needs to address the other key elements of making the UK a great place to invest and create jobs. That includes skills reform, and stability in the fiscal and monetary outlook."
