Professionals across the staffing sector are feeling the pressure from the ever-growing skills shortages impacting the UK. With the latest figures from the Office for National Statistics (ONS) revealing that the number of job vacancies in March to May 2022 rose to a new record of 1,300,000, this trend looks to be far from over.
In fact, APSCo’s own Recruitment Trends Snapshot research reinforces the extent of the ongoing hiring challenges across the country, with yet another month of spikes across vacancies noted in our latest report. When comparing May 2022 to April 2022, we see that vacancies were up 16% for permanent and 19% for contract roles. The annual comparisons, however, revealed the biggest spikes, with contract vacancies increasing 34% between May 2021 and May 2022, while permanent roles grew by 25% year on year. The impressive annual increase in contract vacancies is perhaps explainable by the fact that more businesses have been turning to the flexible segment of the workforce as a means of tackling the ongoing dearth of talent.
Despite this, the data, provided by the global leader in software for the staffing industry, Bullhorn, does indicate a slight dip in hiring towards the end of the month for permanent vacancies, which were down by 3%, while contract roles only saw a 1% rise. This is perhaps unsurprising, as the lead-up to the extended bank holiday and half-term period predictably create a dip in recruitment activity.
Placements and sales on the up. While placements also saw monthly and annual increases across all roles, the yearly uptick in permanent placements (44%) is arguably a cause for concern in a skills short labor market. With these numbers increasing at a time when the Office for National Statistics (ONS) previously revealed that jobs have surpassed the number of people currently unemployed for the first time since records began, the pressure on recruiters will only intensify.
Encouragingly for recruitment firms, though, this spike in placements and vacancy numbers is translating into an increase in sales revenue across both permanent and contract. The data does suggest that the skills shortage continues to drive demand for highly skilled contract professionals, with revenue from these placements up 28% between April and May 2022. While revenue from permanent placements saw a smaller monthly increase (16%), the year-on-year figures revealed a more significant growth, up 43%.
After analysis of Bullhorn’s daily tracking data, we see that permanent placements spiked 14% in the final half of May 2022, which translated into a 19% uptick in sales revenue in the final two weeks of the same month. Permanent salaries remained relatively stable throughout the month, increasing just 1% in the final few weeks when compared to the start of May.
Contract placements, in comparison, fell 6% towards the end of the month. Despite this, sales revenue for contract placements was up 10% in the final two weeks of May, which gives a good indication of the level of demand for highly skilled and highly paid contractors.
What needs to be done? The UK’s labor market is reaching breaking point, and this latest data suggests hiring demand is unlikely to slow anytime soon. In recent months, we’ve seen record-breaking vacancy numbers reported by the ONS and the first-ever instance where there are more jobs than people out of work. At a time when the market is so tight, it seems that businesses are really seeing the value that external recruiters can provide and will continue to do so in the coming months.
In a post-Brexit and Covid-hit economy, the strength of the labor market will be paramount to the UK’s ability to become — and crucially, remain — a global powerhouse. However, if this is to be achieved, change needs to happen, which is why it’s vital that the country’s policy makers implement an internationally viable approach to boosting the UK’s access to skills. This includes creating an attractive entry route into the country for highly skilled self-employed professionals and refocusing international trade deals on skills, the workforce and the mutual recognition of services and professional qualifications as well as tariffs and goods.