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Report on jobs: Overall Vacancy Growth Improves Despite Candidate Shortages

09/03/23 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 February 2023.





  • Overall vacancy growth improves
  • Fall in candidate supply softens
  • Starting pay rates continue to rise

The starting pay for both permanent and temporary/contract roles rose further, with employers facing difficulties to attract and secure skilled staff. Billings for contract/temporary workers also continued to expand, albeit modestly. The overall vacancy growth also saw an improvement during the month of February.

A stronger increase in permanent staff demand was seen which contributed to an increase in the Total Vacancies Index from 54.5 to 55.6 in February. However, the demand for contract and short-term staff rose at the softest rate for two years. Speaking about this, Claire Warnes, Partner, Skills, and Productivity at KPMG UK said: "The current economic outlook continues to impact hiring activity as employers keep playing the short game by focusing on temporary hires.”

Recruiters cite Market Uncertainty as the cause for skills shortages:

According to the surveyed recruiters, general shortage of skilled professionals is still causing issues. They attributed lower permanent candidate numbers to market uncertainty and the cost-of-living crisis, which has driven a greater reluctance among employees to seek new roles. They also shared that many workers preferred permanent job roles, while employers focused on temporary/contract hires instead. This also led to a further rise in pay for permanent new joiners, with higher salaries widely linked to efforts to attract and secure candidates amidst the rising cost-of-living. Claire Warnes had this to say: “Despite the rate of vacancy growth, candidate shortages remain, with recruiters citing hesitancy to move roles and longstanding, systemic skills shortages. These factors combined continue to play into pay inflation as employers try to compete with the rising cost of living. What the economy needs now more than ever is a skilled workforce.”

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

Future Outlook:

February’s numbers showed a continued increase of workforce participation, in a welcome sign that the UK’s labour market is improving. The Office for National Statistics shared that the number of open roles fell by 76,000 compared to the prior three-month period to 1,134,000, to mark the lowest level of vacancies since September 2021. However, the figure remained 38% higher than pre-pandemic levels. Kate Shoesmith, REC Deputy Chief Executive, had this to say about the situation: “As hirers work out what variable economic forecasts might mean for their business and staff, it makes sense that we continue to see contract/temp billings hold up so well. Temporary staffing ensures firms can continue to provide goods and services, even when the economic outlook is unclear. Demand for staff continued to expand across both the private and public sectors. The rising cost of living, plus difficulties attracting and securing suitably skilled staff are also driving increases in starting pay. It will be particularly important to watch for any early trends coming from this data on regional disparities in supply and demand in the labour market.”

Redline Group 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 in knowledge-led recruitment, 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.