UK recruitment industry faces challenges amid cooling labor market
2023.11.03 02:16
The UK recruitment industry is currently facing a series of challenges, including a cooling labor market, struggles to offer inflation-beating pay rises, and jobseekers’ reluctance to commit. PageGroup highlighted the reduced flow of candidates and increased difficulties in filling vacancies.
According to Gartner’s research, many job seekers received multiple offers during their last job search, with some remaining open to other proposals even after accepting an offer. This has led to the rise of “buyback offers”, where employers counterbid to retain staff when wage growth slows down, as noted by PageGroup.
The recruitment industry had benefited from an active market over the past two years due to the “great resignation” — a mass exodus of workers during the pandemic. This trend contributed to a significant increase in the market value of UK recruitment firms, reaching £141 billion in 2022, a £20 billion increase from 2019 according to Mintel. However, this year has seen a decline in permanent job vacancies, negatively affecting recruiters’ income and profits.
Job seekers are now considering the whole package offered by employers, including career progression, mental health support, work-life balance, and remote-working opportunities. If these areas are not adequately addressed by companies, job seekers are likely to continue their search.
A ranking by The Financial Times and Statista identified only four of 154 UK recruitment agencies that were recommended in 10 or more categories. The survey underscores the challenges recruiters face such as high inflation rates, post-pandemic work pattern shifts, and acute skills shortages due to Brexit.
Hays UK and Ireland indicates that despite organizations increasing pay as living costs rise, salary dissatisfaction remains high. They emphasize that professionals are prioritizing job fulfillment and working for purpose-driven organizations. Candidates also want clarity on flexible working conditions before accepting an offer.
Despite a cooling jobs market, certain sectors remain vibrant. PageGroup points out that the tech sector is particularly interesting with high-profile redundancies being absorbed quickly into the market. Hot areas include artificial intelligence-related jobs and finance roles. Companies are also focusing on enhancing the “employee experience” to attract and retain talent in this new age of working.
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