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Hiring conditions see improvement as confidence grows

12/04/23 David Collins Business/Customer Development Manager

The Report on Jobs by the KPMG and REC is unique in providing the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies, such as the Redline Group, and employers to provide the first indication each month of labour market trends. Here are the main findings for March 2023.





  • Marked increase in vacancies
  • Demand for staff continues to increase
  • Overall worker supply improves
  • Contract pay rates on the rise

March survey data showed signs of improvement in hiring conditions as total vacancies rose in number and the overall supply of workers increased for the first time since February 2021. Pay rates for contract/temporary workers also continued to rise sharply. Recruiters also noticed further increases in starting pay for permanent employees.

Candidate availability to fill roles increased at the end of the first quarter. This was signalled by the seasonally adjusted index posting above the neutral 50.0 level at 51.4. The upturn was modest but ended two-years of falling staff supply. Speaking about this, Claire Warnes, Partner, Skills, and Productivity at KPMG UK said: “March was a curate’s egg for the jobs market. Candidate availability improved for the first time in over two years as people regained the confidence to look for new roles, but economic uncertainty caused firms to make redundancies and often opt for temporary hires over permanent placements.”

Staff Availability Improved:

The availability of candidates to fill roles had been on a downward trend for the past two years but finally turned around at the end of the first quarter. 

For permanent candidates, recruiters linked the increase to relative improvement in confidence among job seekers which helped to lift numbers in the latest survey. However, panel members mentioned that redundancies had also contributed to increased staff supply.

The rate at which short-term candidate supply expanded was modest but represented a marked turnaround from the considerable falls seen for much of 2021 and 2022. Recruiters frequently linked the improvement to the end of projects and the reduced usage of contract workers at some clients due to cost-cutting efforts.

Staff Demand Continued to Rise:

Permanent job openings continued to rise at a quicker rate than seen for contract or temporary roles. Marginally lower permanent placements were linked to clients' hesitancy to commit to new hires amid ongoing economic uncertainty. Subsequently, the billings received from the employment of contract/temporary staff increased at the end of the first quarter. The rate of expansion was the best seen in six months. There were numerous reports that a preference for professional contract labour and short-term staff in an uncertain economic climate helped drive the latest upturn in billings.

All ten monitored job categories registered an increase in permanent and contract/temporary staff demand. The steepest upturn was seen in the Medical and Engineering sectors. The rate of growth was particularly interesting with respect to continued skills shortages in areas such as design, electronic hardware, mechanical and electrical engineering, along with developers, data scientists, cyber security specialists, software engineers being sought out. Contractor demand continued in most engineering and IT areas including cyber security professionals, software developers and Python.

Future Outlook:

The official headline numbers showed progress on vacancies being filled but there is still a long way to go to get back to pre-pandemic levels of stability and labour supply. However, the latest data from the Office for National Statistics (ONS) brought good news in the form of the employment rate going up by 0.1% and the economic inactivity rate going down by 0.2%. Neil Carberry, REC Chief Executive, had this to say: “The big news is that candidate availability is up for the first time in more than two years. This suggests that, while the market is still tight, it should be getting gradually easier for firms to hire over the next few months. The continuing fast rate of pay growth is likely reflective of the impact of inflation on wage offers, as well as low labour supply. That means increasing pay is likely to persist, despite more people beginning to look for work. But this cautious optimism belies the scale of the challenge we face in tackling shortages and addressing economic inactivity.”A note of caution from the data provided by the ONS is the number of people economically inactive due to long-term sickness, which has risen again after a couple of months of falling. So, although there are bright spots in this month’s reports, governments and business alike need to do better for the million-plus people who are economically inactive but willing to work right now, and the million-plus who don’t want a job now but expect to work in the future.

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 passionate, 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 or call him at 01582 878804.