COVID-19 pandemic leads to record fall in hiring activity in April

Permanent placements decline at record rates

Renewed falls in both starting salaries and temp pay Demand for staff deteriorates at fastest rate in series history

Permanent staff appointments fall at record pace

The number of people placed into permanent job roles in the South of England fell for the second month running in April. Furthermore, the rate of decline gathered pace since March and was the most severe in the survey’s more than 22-year history. Recruiters in the region frequently cited that the coronavirus disease 2019 (COVID-19) pandemic and associated restrictive measures had led clients to implement hiring freezes. Across the UK as a whole, permanent placements also declined at an unprecedented rate.

Demand for staff across the South of England deteriorated substantially at the start of the second quarter.

Permanent vacancies fell sharply and at the steepest rate since the survey began in October 1997. A record drop in demand for permanent staff was also seen at the UK level. Temporary vacancies in the South of England likewise fell at an unprecedented rate. Notably, the reduction in short-term positions was slightly faster than seen across the UK as a whole.

Availability of permanent candidates rises for first time since June 2013

After having fallen in each of the past 81 months, the supply of permanent staff in the South of England increased during April. Moreover, the rate of growth was the sharpest seen since October 2009. The increase was attributed by panel members to company layoffs and decisions to furlough staff due to the pandemic. A renewed upturn in permanent worker supply was also seen at the UK level, with the rate of expansion similar to that seen for the South of England and marked.

Startinng salaries fall for the first time since June 2012

After rising only slightly in March, latest survey data signalled an outright decline in average starting salaries for permanent workers in April. Not only was it the first time that permanent starters’ salaries had fallen since June 2012, but the rate of reduction was the quickest in 11 years. Anecdotal evidence indicated that the coronavirus pandemic led clients to cut salary offers. Starting salaries also decreased at a historically sharp rate across the UK as a whole.

As significant as April’s results are they are hardly surprising given the current circumstances. Like the rest of the UK, COVID-19 continues to wreak havoc across the South of England jobs market, with the economic uncertainty it is causing weighing heavily on the region’s firms.
“All businesses in the South can do is remain resilient and adapt as necessary to survive this pandemic, as we await the Government’s forthcoming announcement on easing current restrictions so confidence in the jobs market can start to rebuild

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Severe drop in recruitment activity during March

Quickest drops in permanent placements and temp billings since early-2009

Staff vacancies decline

Slower increases in pay for both permanent and temp staff

The coronavirus pandemic has put the labour market on pause. It does mean massive disruption in the short term, but we need to remember that this has to be done in order to protect businesses and save lives.
What we should be concerned about is how we stop that short-term disruption becoming longer-term economic depression. To do that we need to maintain employment levels as much as possible. Businesses in high-cashflow sectors like recruitment and hospitality need to be able to access government support much more quickly than they currently can, or they will not be able to afford to furlough their workers. This and other measures like government covering statutory sick pay for all firms will help people and firms to stay afloat now, and help the economy bounce back once the crisis is over.

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Employment Law Changes 2020

The Government intends to introduce a new Employment Bill which will include some changes already anticipated by the Good Work Plan. The Employment Bill will provide for:

  • The right to request a more stable and predictable contract after 26 weeks’ service;
  • The right to neonatal leave and pay for parents of premature or sick babies;
  • A single market enforcement agency to better ensure that vulnerable workers are aware of and can exercise their rights and which supports business compliance;
  • The extension of the period of redundancy protection from the point an employee notifies her employer of her pregnancy until six months after the end of maternity leave;
  • A week’s leave for unpaid carers;
  • Making flexible working the default right where employers do not have a good reason not to allow it;
  • Tips to be received by workers in full; and
  • The Government will also be bringing forward detailed proposals next year following its “health is everyone’s business” consultation. These will include measures to encourage employers to play their role in retaining disabled people and people with health conditions in the workplace. The Government intends to reduce the disability employment gap and to reach the existing goal of an increase of one million disabled people in work between 2017 and 2027
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Market Commentary Nov 18 – Demand still high

  • Steeper increases in permanent placements

  • Starting salary inflation close to September’s recent high

  • Steeper decline in candidate supply

Commentary

 “firms continue to hire new staff at near record rates. With the jobs market so heated, businesses across the country, of all types, are struggling to find work ready staff. Some clients tell us they are seeing the worst period of staff availability for many a year. A four-decade low in unemployment means good candidates are at a premium. Consequently, we’re seeing wages pushed upwards and now may be a good time to move to secure  a pay rise!

Key points 

  • Staff appointments increase at quicker pace…
  • The number of people placed into permanent jobs rose at a sharp and accelerated rate in October.

…as demand for staff remains robust

  • Growth of demand for staff remained historically sharp at the start of the fourth quarter.
  • Starting salary inflation continues to rise…

…driven by sustained fall in candidate availability..

  • Overall candidate availability declined at the quickest pace for nine months in October.

 

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