Recruitment Outlook Report – May 2024

The latest KPMG and REC Report on Jobs provides crucial insights into the current labour market trends, identifying both challenges and opportunities for employers and job seekers. This month’s report suggests a cautiously optimistic landscape, with many businesses waiting for clearer economic signals before making significant hiring decisions. Nonetheless, there are positive signs pointing to a potential upturn.

A landscape of gradual improvement

The report highlights a softer decline in recruitment activities for May 2024, the smallest in over a year; a welcome sign that things are on the up. While permanent placements and temporary numbers continue to fall, the rate of decline has eased, indicating a possible stabilisation in the near future. Employers are still exercising caution due to economic uncertainties and hiring freezes, particularly affecting the temporary job market. However, this cautious stance is starting to show signs of shifting as economic indicators improve. It’s likely that once the General Election is behind us, and the anticipated interest rate reductions have happened, that businesses will regain traction in their hiring plans.

Positive trends in pay growth continue

Despite ongoing challenges, pay rates for both permanent and temporary workers continue to rise, making changing jobs enticing for many would-be candidates in light of the ongoing Cost of Living challenges. May 2024 witnessed another month of notable salary increases, driven by a competitive market and recent adjustments in the National Minimum Wage. For permanent positions, the rise in starting salaries was significant, matching the high levels seen in April. Temporary workers also saw substantial pay increases, reflecting employers' efforts to attract and retain talent amid a tight labour market.

Availability of candidates continues to increase

One of the most striking findings from the report is the marked increase in candidate availability, the highest recorded since December 2020. This surge is attributed to a combination of higher redundancies and reduced hiring, leading more individuals to seek new employment opportunities. While this increases the talent pool for employers, it also underscores the need for businesses to act swiftly to secure skilled candidates. There are excellent opportunities to secure excellent talent, but employers need to recognise this and not miss out, particularly in sectors experiencing skills shortages.

Significant regional and sector variations continue

The labour market continues to exhibit significant regional and sectoral disparities. The North of England and the Midlands are showing stronger recruitment activity compared to London and the South. Sector-wise, engineering and blue-collar jobs are in high demand, while sectors like retail and secretarial/clerical are experiencing sharper declines in job vacancies. These variations highlight the importance of tailored recruitment strategies to address specific regional and industry needs.

Making strong decisions in the current climate

As we move forward, the insights from the KPMG and REC Report on Jobs for May 2024 provide a valuable framework for navigating the evolving recruitment landscape. Our number one piece of advice for businesses is to stay adaptable and informed, leveraging sector-specific and regional data to make strategic hiring decisions. Proactive workforce planning and a focus on competitive compensation (beyond more than a salary) will be crucial in attracting and retaining top talent in this changing environment.

By remaining informed and adaptable on your behalf, we are well-equipped to support your recruitment and growth ambitions, helping you take advantage of current opportunities. The broader economic context is crucial, but addressing the unique needs of your organisation is what will drive success.

We are here to assist you in navigating these complexities, ensuring your business thrives through effective talent management despite the ongoing uncertainties.

Do get in touch on 0161 359 3111 if you would like to know more about the current recruitment landscape or how best to find the best people for your business growth plans.

We publish an overview of the REC/KPMG Jobs Outlook Report each month to keep you up to date with the UK recruitment and jobs market month by month.

Contact us today if you need specialist support to secure your future management or senior-level workforce in Engineering/Manufacturing.

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