Toby Day
Although we've seen a decline in new job postings, CV submissions, and placements, we're all aware of the ongoing market challenges. The summer season typically has a negative impact, so let's focus on what we can control. Use this quieter period to work on strategic projects that will yield benefits later in the year. Review all your touchpoints that can positively impact business development activities, and analyse your data. The positive trends in job coverage and higher CV-to-placement conversions for contract roles offer some optimism.
The numbers from June are showing a slight positive upturn with permanent placements and sales growing through Q2. Additionally, contract jobs showed an almost 9% rise month on month. The positive takeaway for the market from this is to keep working hard and controlling the jobs you do have.
IPOs remain well below historic levels and earnings on UK-listed companies are well below the US average. (11 times vs 20 times.) On top of that, now that the post-Brexit framework is starting to normalise, the surge in hiring seen in order so the Banks could operate with dual regulatory function has now started to ebb. This has meant that 2024 is on track to see fewer vacancies in Financial Services than 2023 if the year continues in the way it has been so far.
It has been a roller coaster year for the MMS market, with individual sectors seeing peaks and troughs of activity throughout the last 12 months. However, despite a strong start to 2024, vacancies and applications across all three markets have dropped in the past month, which employers, recruiters and jobseekers alike will be hoping is only a temporary blip, and not a forewarning of a potential downturn in what is already a skills-short field.
While 2023 presented hurdles for the IT industry, market reports show a focus on maximising return on investment by employers. This aligns with a competitive job market for skilled tech professionals. Despite this focus on efficiency, salaries held steady as companies vied for limited talent. With a brighter economic outlook, we cautiously anticipate a positive upswing in the IT sector in the coming months, easing recruitment challenges.
"The professional recruitment market is still facing tough times. Recruiters are having to work harder with fewer resources. There is some good news, though. Contract placements have gone up by nearly 4% this month. Permanent placements, however, have dipped slightly, possibly because Easter came early this year. Looking at the bigger picture, things are still challenging year-on-year. The number of new jobs advertised is similar to what we saw back in 2017. There's a reason for cautious optimism, though. Sales revenue is getting close to March 2021 levels, which suggests that both hiring rates and salaries are improving."
"January data shows an exciting jump in key metrics compared to December, suggesting a positive trend. However, a note of caution is necessary. Both permanent and contract job openings hit record lows in January, which requires careful analysis."
"While the data suggests a further decline in job vacancies going into 2024, this is far from guaranteed. Inflation has fallen substantially since throughout 2023 and some financial institutions have suggested it will fall into line with the Bank of England’s two per cent target by April. In the same vein, a cut in interest rates (or at the very least, no further increases) should help to instil greater confidence in the business community.
Despite the lingering challenges from a turbulent 2023, there are several reasons for optimism regarding the professional recruitment market in the upcoming year."
“London remains a crucial hub for professional opportunities and is anticipated to contribute 34% of the UK’s professional vacancies in 2023. However, London’s recruitment patterns through the year so far, suggest that vacancies are set to be 39% down on 2022, dipping below the 200,000 mark for the first time since 2020.”
The US is home to a diverse and highly skilled workforce. Estimated at over $200 billion, the US market is considered robust over the medium term. The 10% contraction forecast in 2023 is unsurprising given the macroeconomic backdrop and it follows growth of 34% in 2021 and 20% in 2022. The sheer size of the market allows recruitment firms to scale their operations and tap into various sectors and geographic regions.
Beyond cyclical factors, the US staffing industry is benefiting from growth drivers such as greater acceptance of contingent work arrangements and a shift to remote working that has enlarged the accessible talent pool, as well as the further development and adoption of staffing platform technology. Looking ahead to 2024, 3% growth is projected in the US staffing market.
