Report on Jobs: Roadmap for lifting lockdown leads to substantial increase in hiring activity in March

Key findings 

• Permanent placements and temp billings rise sharply amid improved market confidence
• Vacancies expand at quickest pace since August 2018
• Renewed increases in both starting salaries and  temp pay

Data collected 12-25 March

Summary

The UK government’s plan to ease lockdown measures to return to more normal business operations in the months ahead and vaccine progress led to a marked improvement in recruitment activity in March. The latest KPMG and REC, UK Report on Jobs survey pointed to the sharpest rise in permanent placements for nearly six years, while temp billings growth accelerated sharply. 

The anticipated upturn in activity once coronavirus disease 2019 (COVID-19) restrictions are eased drove the quickest increase in overall vacancies since August 2018. As a result, there were signs of improving pay trends, with both stating salaries and temp wages expanding for the first time in three months. However, the availability of candidates remained broadly stagnant, largely due to concerns around how secure any new employment would be. 

The report is compiled by IHS Markit from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.
 

Recruitment activity rebounds as firms prepare for easing of lockdown measures

March survey data pointed to a substantial increase in hiring activity across the UK, as the easing of national lockdown measures to contain the coronavirus disease 2019 (COVID-19) pandemic and vaccine progress boosted confidence around the outlook. Notably, permanent placement growth hit a near six-year high, while temp billings expanded at the quickest rate since November 2017. 

Substantial increase in overall vacancies

After rising only slightly in February, demand for workers grew rapidly at the end of the first quarter. Notably, the rate of expansion was the steepest seen for just over two-and-a-half years, driven by marked increases in both permanent and temporary vacancies. 

Marked increases in initial pay for both permanent and temporary workers

Stronger demand for staff led to improved pay trends in March. Moreover, starting salaries rose for the first time in 2021 to date and at a sharp rate. Temp wages also increased for the first time in three months, with the rate of inflation the quickest seen since December 2019. 

Candidate supply remains broadly stagnant

The overall availability of candidates was broadly unchanged for the second month in a row in March. While there were still a number of reports that redundancies stemming from the pandemic had driven up labour supply, this impact was largely offset by people who were reluctant to pursue new roles amid fears over job security. 

Regional and Sector Variations

Data broken down by region showed that permanent placements expanded markedly across all four monitored English areas, led by the Midlands.

The Midlands recorded by far the sharpest increase in temp billings of all four monitored English regions, while the softest was seen in London.

In the private sector, permanent vacancies increased at the sharpest rate for 32 months, while growth of short-term positions hit the highest since September 2018. Public sector vacancy growth was subdued in comparison, despite both permanent and temporary roles rising solidly overall.

Nine of the ten monitored job categories recorded an increase in permanent staff vacancies in March. The steepest rates of expansion were seen in Nursing/Medical/Care and IT & Computing. Retail was the only sector to register a decline.

Blue Collar led the upturn in demand for short-term staff during March. Nonetheless, marked rates of growth were also seen across the majority of the remaining job categories. The only sector to note lower demand was Retail.

Comments

Neil Carberry, Chief Executive of the REC, said: 

“For months, we have been talking about the potential recruiters saw for a recovery in hiring as we got on with vaccinations and the lockdown did its work. Today’s data shows that even during lockdown, our labour market was bouncing back. The strong temporary recruitment trend of the past few months has been maintained, but with a new addition – the fastest increase in permanent job placements since 2015. Taken together with a long-awaited recovery in hiring in London, this is a sign that business confidence is starting to flow back, even at this early stage of unlocking.

“As companies start to recruit, they will need to appreciate that the labour market is still suffering from all sorts of shortages. So reviewing their hiring practices and doing things in the best way possible will matter more than ever. Inclusive hiring is not a tick-box exercise – it’s about finding the best candidate for the job no matter who they are, to help your business succeed. By working with professional recruiters, business leaders can help create fairer, more inclusive and more productive workplaces.”

Commenting on the latest survey results, Claire Warnes, Partner and Head of Education, Skills and Productivity at KPMG UK, said:

“The UK job market is starting to rebound off the back of the Government’s plan to ease national lockdown measures over the coming months, with the highest rise in permanent placements in six years and a sharp increase in temporary billings. 

“This is good news for businesses, job seekers and the UK economy, but employers are still identifying a big skills gap across sectors including IT, construction and retail, with demand and supply not matching up. 

“That’s why as we start to look beyond the pandemic, businesses will be even more crucial in making sure prospective and current employees are adaptable, productive and ready for new challenges.”

Ends

Contact

For more information and interview enquiries, contact the REC Press Office on 020 7009 2192, 020 7009 2157 or pressoffice@rec.uk.com. Outside of regular office hours, please call 07702 568 829.

For further information on the survey methodology, or for full reports and historical data from the Report on Jobs, please contact economics@ihsmarkit.com.

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