The overall supply of candidates for jobs has increased for the first time in more than two years, a survey of recruiters suggests.
While the rise in the availability of workers in March was “modest”, it marks the first such upturn in the UK since February 2021, a report from the Recruitment and Employment Confederation (REC) and KPMG said.
Researchers said the increase was driven by improvements in the availability of both permanent and temporary staff amid greater “confidence among job seekers” – alongside “signs of a relative improvement in hiring conditions”.
The rise suggests that the tide could slowly be beginning to turn on labour market tightness in the British economy which has prompted widespread concern in recent years.
REC chief executive Neil Carberry said that while staff shortages remained a major challenge for many firms, the overall increase in available candidates was “big news”.
“This suggests that, while the market is still tight, it should be getting gradually easier for firms to hire over the next few months,” he said.
“The continuing fast rate of pay growth is likely reflective of the impact of inflation on wage offers, as well as low labour supply. That means increasing pay is likely to persist, despite more people beginning to look for work.”
Mr Carberry added that it was “still a good time to be looking for work”, particularly in hospitality, healthcare, accountancy and financial roles.
However the report cautioned that redundancies amid economic uncertainty had also contributed to the numbers of fresh candidates looking for work – and that the jobs market was still lagging far behind pre-pandemic levels.
Mr Carberry warned that government and businesses still needed to do more to attract potential employees, arguing that the chancellor’s recent budget measures had not gone far enough.
He said: “This cautious optimism belies the scale of the challenge we face in tackling shortages and addressing economic inactivity.”
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The UK Report on Jobs, which is based on a survey of around 400 recruitment and employment consultancies, said the availability of staff to fill roles hit 51.4 on its index in March – the first time it has been in positive territory in 25 months.
Any figure above 50 on the seasonally-adjusted index indicates an improvement on the month before.
A ‘curate’s egg’ for jobs
Since 2019 the supply of workers had been rising sharply in the UK, according to the index, until it plunged as COVID-19 hit the economy. The previous increase, in February 2021, had only been a “fractional” rise following a spate of pandemic-related redundancies, with the next two years then continuing to see a decline in staff availability.
Today’s report also suggests that starting salaries and total vacancies are continuing on an upward trend, although growth in the number of jobs on offer was down slightly on February’s data.
Claire Warnes, a partner at KPMG, described March as being a “curate’s egg” for jobs.
“While the labour market continues to show resilience, it is nowhere near pre-pandemic levels of stability,” she said.
The report further found that growth in temp billings hit a six-month high in March, suggesting that uncertainty about the economy had prompted firms to opt for temporary hires over permanent placements, the latter of which saw a “marginal” decline.
Delivery giant Just Eat is among the companies to recently switch to a greater reliance on temporary workers. It announced plans last month to axe 1,700 jobs as part of moves to replace its hybrid system of employees and self-employed with gig economy workers.
