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Report on Jobs; Strong Demand Supports Increase in hiring activity in September

The latest KPMG and REC, UK Report on Jobs for September, is unique in providing the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies, such as Redline Group, to provide the first indication each month of labour market trends. The critical information we help provide allows clients to make informed decisions over their recruitment strategies. Here’s the report and analysis on September.


The rising cost of living and competition for scarce workers drove further marked increases in starting pay for both permanent and contract / temporary staff in the latest survey period. Yet, at 1,266,000 the overall number of open roles across the country was +20% higher than a year ago, but this marked the slowest annual rate of growth since the three months to April 2021. Permanent candidate numbers fell sharply across all four monitored English regions.

The seasonally adjusted Total Vacancies Index fell from 62.2 in August to 58.1 in September, to signal a slower but still sharp rise in demand for staff. That said, the rate of growth was the weakest seen since the current period of expansion began in February 2021.The steepest increase in demand for staff was seen for contract/temporary workers in the private sector during September. Speaking about this, Claire Warnes, Head of Education, Skills, and Productivity at KPMG UK had this to say: “Those employers who continue to invest in their workforce, particularly upskilling, may find they weather the recession better and will be in a stronger position to benefit from the upturn as and when it comes.”

Candidate Shortages and the Repercussions:

A key factor weighing on candidate availability was increased market uncertainty, which often meant people were more hesitant to apply for new roles. Reduced candidate numbers were also linked to a generally low unemployment rate and Brexit. Subsequently, candidate shortages and the rising cost of living also drove a further increase in pay for contract/short-term staff in September. Average hourly wages have now increased in each of the past 19 months. Neil Carberry had this to say about the situation: “The REC has shown that failing to address these issues could cost our economy massively in the years to come. While there is much that Government can do, like reforming the failed Apprenticeship Levy, a lot of the answers lie with hiring businesses. Firms need to work with skilled recruiters on offers that will maximise the skill base we have. There has never been a more important time for business leaders to put the people first."

Effects On Engineering/IT sector:

Growth of demand for permanent staff softened across nine of the ten monitored job categories in September. There were also reports that candidate shortages and increased caution around the outlook had dampened hiring activity. Despite the slowdown, Engineering jobs were among the sectors that saw the strongest increase in permanent vacancies. In particular software, design engineering, electrical and mechanical engineers, CAD, developers, Digital/IT and technicians were in short supply in the permanent sector for Engineering/IT. Contract skills shortages on the other hand comprised of cyber security, software developers, technology, and engineering professionals.

Neil Carberry, Chief Executive of the REC, said: “With unemployment at record lows, pay continues to rise for both temporary and permanent workers starting new jobs, and activity levels across the recruitment and staffing industry remain high. While any economic slowdown this winter will affect the market, the extent of shortages mean that hiring will remain a focus for employers.”

The way forward:

In the week of 19-25 September, active job adverts hit a low of 1.45 million, but this is still a high level relative to pre-pandemic, reflecting the impact of skills shortages. Although active job postings have cooled down, employment and hours worked are still below pre-pandemic levels. Unemployment has also hit its lowest point in decades. The latest figures from the Office for National Statistics (ONS) reveal that the unemployment rate for May to July 2022 decreased by 0.2% on the quarter to 3.6%, the lowest rate since May to July 1974. This shows that employers are still hiring and the lowest unemployment rate in decades means recruitment remains significant to the UK economy.

While returning the National Insurance levels and repealing the changes to IR35 will provide some relief to businesses, labour shortages and economic inactivity are still key issues that need to be tackled. Without action on productivity, higher inflation and higher interest rates will remain. This emphasises the need to attract and support people back into the labour market. Government and businesses need to collaborate to bring young people into the workforce by reforming the skills system. They also need to ensure we have an immigration system that is responsive to the needs of our economy.

Redline Group continue to be one of the UK’s most trusted Electronics and High Technology recruitment specialist for professional Contract, Permanent and Executive positions. With four decades of experience, enabling high-technology businesses to build world-class teams via knowledge-led recruitment, Redline is perfectly positioned to offer advice about future-proofing your permanent, contract and interim needs. For more information about this month's report, give us a call on 01582 450054 or send us an email .


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