Market News Jan / Feb 21

Permanent placements fall

A third national lockdown amid a rise in coronavirus disease 2019 (COVID-19) cases, and a subsequent drop in market confidence, led to a renewed contraction in permanent staff placements during January. The rate of decline was the steepest seen since last June, albeit not as severe as those seen during the first lockdown.

January sees fresh decline in overall vacancies

Latest survey data also revealed a fall in overall demand for workers at the start of the year, after a slight increase in December. The reduction was driven by a marked decline in demand for permanent staff, as temporary vacancies expanded modestly.

Availability of staff rises at weakest pace for ten months

The supply of candidates rose solidly in January, despite the rate of increase easing to a ten-month low. The slowdown was driven by softer expansions in both permanent and temporary candidate numbers.

Recruiters frequently mentioned that redundancies had pushed up staff supply. However, there were also reports that greater uncertainty over the outlook had weighed on candidates’ appetite for new roles.

Renewed fall in starting pay

Recruitment consultancies signalled renewed downward pressure on pay in January, as both starting salaries and temporary wages fell after increasing in December. That said, the rates of reduction were mild compared to those seen in 2020.

The latest national lockdown has knocked business confidence, evident by a

renewed drop in permanent appointments as businesses put recruitment on hold.

There has been an uptick in short-term vacancies, but these are mainly in

blue collar and the medical response industry, indicating that they are filling a temporary need for staff rather than pointing to long-term job opportunities.

However, there is cause for optimism as businesses carefully monitor the vaccine rollout and look forward to the Budget next month. It gives the Government the opportunity to further help the recovery in jobs and revive the UK’s productivity growth.

Source – IHS Markit. Produced in association with REC

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