Hiring People January Update: A Fresh Perspective on the Recruitment Landscape
As we warmly welcome the new year, it’s the perfect time to reflect on the dynamic and ever-evolving world of recruitment. The past year has been a whirlwind of change, with the recruitment landscape reshaping itself in surprising ways. Let’s delve into some key insights that will help navigate the year ahead.
Highlights and key takeaways:
- Overall, 2023 continued as a candidate-driven market.
- Job applications soared by almost one-third in 2023, while job postings declined by almost one-fifth.
- Salaries increased at a pace that outstripped inflation, easing the cost of living crisis.
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A Year of Transition: Insights from 2023
2023 was a year marked by significant shifts in the UK job market. The landscape transformed in ways that diverged from the patterns we’ve grown accustomed to in recent years. Factors such as looming recession fears, fluctuating inflation rates, and widespread redundancies have played a pivotal role in this transformation.
Initially, a staggering 63% of recruitment professionals anticipated a sustained candidate-driven market. However, as 2023 unfolded, it became evident that the 20% predicting a shift towards an employer-driven market were on the mark.
A Surge in Job Applications
Despite economic headwinds, job applications saw a notable rise in 2023, climbing 29% above the previous year’s figures. This increase can be attributed partly to the uptick in redundancies, which led more professionals to seek new opportunities. Additionally, the recent surge in wage growth, outpacing inflation for the first time in almost two years, encouraged many to pursue roles with better remuneration.
This trend was widespread across sectors, with significant application increases in General Insurance (64%), Leisure & Tourism (61%), and IT & Telecoms (60%). However, some sectors like Customer Service and Training witnessed a slight decline in application numbers.
The Ebb and Flow of Job Vacancies
Conversely, job postings experienced an 18% decline in 2023, as evidenced by data from Reed.co.uk. This reduction is likely a response to the challenging economic climate, with employers adopting a more cautious approach to hiring.
Hospitality & Catering, Media, Digital & Creative, and Manufacturing sectors saw the most substantial decreases in job postings. However, some sectors like Motoring & Automotive, Energy, and Education displayed resilience, showing positive growth in vacancies.
2023 Salary Trends
In the salary arena, 2023 was a year of keeping pace with inflation, which peaked at 10.4% in February before easing to 3.9% by November. Salary growth mirrored this trend, slowing to 6.2% in November from a high of 7.7% in March. This alignment of pay with inflation offers a glimmer of hope for easing the cost of living pressures.
The Hospitality & Catering and Retail sectors led the pack in salary growth, while Financial Services experienced a slight decline.
Looking Ahead to 2024
As we venture into 2024, the transition to an employer-led market is likely to continue. The economic outlook hints at a slowing inflation rate and modest growth, setting a positive stage for recruitment. With an abundance of talent available and government initiatives like extended free childcare, the recruitment sector is poised for an optimistic year.
Reflecting on 2023, we’ve witnessed a significant market shift, predominantly driven by economic challenges. Despite this, certain sectors have shown resilience and adaptability. As we approach 2024, we expect the candidate-driven market trend to continue with slight movement in the direction of an employer-led market, offering a ripe opportunity for strategic hiring and talent acquisition.
In conclusion, the recruitment landscape is in a state of flux, but with these insights and our continued partnership, we are well-positioned to navigate these changes successfully.
