May 2024 Report on Jobs: Overall Labour Market Pressure Easing

Discover the latest insights into the UK labour market through the KPMG and REC, UK Report on Jobs, featuring exclusive data from recruitment consultancies, such as Redline Group. The detailed report leverages  original survey data, providing a monthly overview of labour market dynamics.  Here are the key highlights from April’s data.

Key Findings from the April Report:

• Placements fell at weakest rate since June 2023.
• Pay rates increased to attract quality candidates.
• Engineering sector registers highest growth in surveyed sectors.

Overview

With candidate availability at it’s highest, pay rates have improved as firms are still interested in attracting candidates with the right skill set. Permanent placements and contract/temp billings also continued to fall. However, experts share that the labour market is on the brink of a turnaround.

Candidates: Supply and Demand

There was another sharp increase in candidate numbers based on April data, with the rate of growth accelerating to the steepest recorded since last November. Both permanent and temporary/contract candidate supply increased at similarly sharp rates and recruiters attributed the increase to greater redundancies leading to a greater volume of jobseekers on the market.

Permanent placements fell further, although the decline was the weakest noted since June 2023. A lack of suitable candidates to fulfil positions was also cited by panellists, who also noted heightened caution among firms holding back on recruitment. Temp/contract billings also fell at a softer rate, the weakest noted in three months.

Speaking about this, Neil Carberry, REC Chief Executive, said: “The critical moment in any labour market slowdown is the point at which demand starts to turn around. Today’s hiring data suggests that point is close, with fewer recruitment firms reporting a drop in demand. While the trend is still gently down, the pace of decline in permanent hiring is the slowest in ten months. Temporary/contract hiring, which has had much less of a decline overall, also scored better than last month.”

Engineering Sector Continues to Flourish

Whilst over 200,000 down from a year ago, vacancy numbers remain some 120,000 higher than the pre-pandemic level of 796,000 posted in the three months to March 2020. The Engineering sector continued to grow despite demand in most sectors slowing down.

Seven out of ten broad sectors covered by the survey registered a drop in demand for permanent staff. Of the three sectors where growth was registered, the strongest rise was for Engineering. For temporary/contract roles, engineering registered the second- highest growth. Skills shortages in permanent and contract/temp staff were noted for the following specialist areas: Electrical, Mechanical, RF, Software Development, IT Systems Administration , SMT Process Engineering along with C++, CAD, Full-stack and AI Developers and Cyber Specialists.

Search For Highly Skilled Candidates Pushing Up Pay Rates

April saw a continued increase in permanent starting salaries extending the current period of inflation to 38 months. The rate at which salaries rose also accelerated to its highest level of the year so far (though remained below trend). While a big part of the increase comes from the usual seasonal impacts of annual pay awards and changes in the national minimum wage, panellists commented that competition for quality candidates had led to upward pressure on starting salaries.

Neil Carberry summed up the discussion by saying:

“Pay continues to rise, with a slight bump up this month likely to have been driven by the April peak in employer pay rises and the recent Minimum Wage rise. With substantial wage rises attracting people to work, and low unemployment, businesses and government alike will need new approaches to developing and engaging our labour force – alongside new technology – if the UK is going to grow in the way it needs to.”

Redline Group changes lives every day, building world-class teams for technology companies. We continue to be one of the UK’s most trusted Electronics and High Technology recruitment specialists for professional Contract, Permanent, and Executive positions. With four decades of experience our enthusiastic, knowledge-led people create trusted recruitment solutions. Redline is perfectly positioned to offer advice about future-proofing your permanent, contract and interim needs in the technology sector.  

For more information about this month's report, contact David Collins on Info@RedlineGroup.com or call at 01582 878804.