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Recruitment experts at odds on UK market recovery

By Dawn Gibson

The analysts at job search engine Adzuna are confident that the UK is leading a hiring recovery in Europe, pointing to a 16.3% rise in job vacancies during January.

However, the latest KPMG and REC, UK Report on Jobs survey paints a very different picture, highlighting a sharp drop in permanent staff appointments, the steepest rate of decline since last June, driving an overall fall in demand for workers at the start of the year.

The conflicting reports are a sign of not just how different methods of analysis can produce very different results, but the difficulty of reading a market at a time of extreme uncertainty and varied drivers – on one hand, the vaccine promises a path out of lockdown and a return to a more normal economy; on the other, the third national lockdown has further eroded market confidence on top of the battering inflicted in 2020.

Adzuna: More than 168,000 jobs added in January
The Adzuna research is thorough, involving the analysis of more than 12 million live job vacancies aggregated in real time from thousands of unique job sources across 12 international markets.

The key finding for the UK is that the jobs market added more than 168,000 vacancies during January, a rise of 16.3%, as the Covid-19 vaccination roll-out boosted employer optimism. Adzuna’s figures show this as the highest number of jobs offered since March last year.

The analysis shows the UK leading the jobs market recovery in Europe, with the increase in vacancies beating similar upticks in France (+14.2%), Austria (+6.3%), and The Netherlands (+0.3%). Meanwhile Germany (-3.5%) and Italy (-9.2%) have both seen hiring fall so far this year.

Sector by sector, the biggest increases in the UK are in Scientific & QA jobs (+32%), IT jobs (+30%) and Financial & Professional Services (+26%). Top companies leading the hiring push include Barchester Healthcare (2,399 jobs), Amazon (1,917 jobs), discount supermarket Aldi (1,513 jobs) and engineering company AECOM (1,471 jobs).

Adzuna Co-founder Andrew Hunter sees the data as an indicator that the UK is “well on the way to a hiring recovery.”

“The UK jobs market was hardest hit last year but is now recovering quicker than the rest of Europe,” he continues. “The IT sector is hiring fiercely, with job openings now back at pre-pandemic levels. Financial & Professional Services jobs took a big hit last year but are finally bouncing back. And Scientific & QA openings are also growing, boosted by vaccine research, production and roll-out.”

KPMG and REC: Overall fall in demand for workers
However, judging by their latest report, KPMG and the REC could have been analysing a completely different market. Their analysis, compiled by IHS Markit from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies, reveals a fall in overall demand for workers in January, after a slight increase in December. The reduction is driven by a marked decline in demand for permanent staff – the steepest decline since last June, according to KPMG/REC – as temporary vacancies expand modestly.

The report cites the rise in Covid-19 cases and the imposition of a third national lockdown, leading to a subsequent drop in market confidence, as the trigger for the slump in permanent appointments.  At the same time, greater uncertainty is underpinning a further increase in the use of short-term staff.

According to the KPMG and REC, UK Report on Jobs survey, demand for permanent staff fell in six of the 10 categories monitored by the survey. Of the areas that noted higher vacancies, Nursing/Medical/Care registered the steepest increase. Short-term vacancies rose across half of the monitored job categories, with Nursing/Medical/Care and Blue Collar experiencing the fastest rates of expansion.

James Stewart, Vice Chair at KPMG, says 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.”

Who do you believe?
So, are Adzuna and KPMG/REC diametrically opposed? The short answer is no. Apart from the very different methods of their analysis, one of the reasons for the variance is the use of different date ranges – Adzuna’s findings were based on live vacancies from January 4 to 31 while KPMG/REC worked with questionnaire data collected from January 12 to 25.

Also, the experts agree that the vaccination roll-out is expected to be a catalyst for market recovery – the point of difference is over whether this has already begun.

“January saw the Covid-19 vaccine rolled out at pace across the UK and that has filtered through into a major jobs boost,” Hunter from Adzuna says. “There are nearly 170,000 more jobs being advertised than at the start of was a game-changing month for hiring in many sectors.”

Neil Carberry, Chief Executive of the REC, says that, with economic uncertainty weighing on employers’ minds even where they see potential for their own firm to grow, it’s no surprise that temporary work is leading the jobs recovery. “This emphasises again how important flexible forms of work are to helping businesses and public services react to the pandemic,” he continues. “Temporary work is also helping people get back into jobs more quickly after the recent spike in redundancy numbers.

“With the vaccination programme making progress, it’s likely that a path out of the pandemic is emerging. As that happens, we expect a strong recovery in permanent hiring. But businesses need Government help to bridge these last few months. Support for strained corporate cash flows is key.”

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