Permanent vacancies increase 1% year-on-year
Finance & accounting roles up by 10%
Demand for engineering professionals dips 14%
Contract vacancies increase by 1%
Average salaries slide month-on-month, decreasing by 0.1%
Professional recruitment firms now have 1% more vacancies on their books than this time last year according to new survey data from the Association of Professional Staffing Companies (APSCo). This is in line with the latest data from the Office for National Statistics (ONS), which reveals that overall employment levels increased modestly by 44,000 in the three months to March 2016, representing an employment rate of 74.2%.
Finance & accounting sectors driving growth
The latest data from APSCo reveals that vacancies within the finance and accounting sectors continue to climb rapidly despite uncertainty surrounding the upcoming EU referendum, increasing by 10.2% year on year. This is in line with the latest data from specialist recruiter, Morgan McKinley, which found that available jobs in the City increased by 11% month-on-month to April.
Engineering vacancies dip
In contrast, APSCo’s data found that engineering vacancies have dipped by 14% year-on-year. This comes at a time of huge uncertainty for the sector as the Institution of Engineering and Technology (IET) warns of the potential ramifications if the UK were to leave the EU. The future of the British steel industry – and the associated impact on jobs – is also currently in limbo as Tata Steel considers investment partnership bids.
Average salaries slide
APSCo’s figures also reveal that median salaries across all professional sectors dipped by 0.1% month-on-month following a sustained period of growth. This figure is characterised by notable fluctuations in terms of sector, with education, for example, recording an uplift of 11.2% while salaries within property and housing fell by 2%. Year-on-year, professional salaries rose by 3.4% across the board which exceeds the national increase in salaries as reported by the ONS which found that average earnings grew at an annual rate of 2% in the three months to March 2016.
Ann Swain, Chief Executive of APSCo comments:
“The relatively soft 1% growth in demand for both permanent and contract roles indicates that Brexit uncertainty is no doubt affecting the professional jobs market. This is further illustrated by the fact that average salaries dipped month-on-month in April for a fourth consecutive month.”
“The recruitment firms that we work with have reported that employers are taking a ‘wait and see’ approach to future workforce planning. Other indicators of market confidence also reflect this hiatus in confidence and associated activity. May’s Markit / CIPS services business activity PMI stood at 52.3, the lowest since February 2013. The construction sector PMI is also at a three-year low, and the manufacturing PMI has now fallen below that critical 50 figure, sitting at 49.2. Meanwhile, the Bank of England’s rate setters have said they will wait for evidence of stronger wage growth before raising interest rates from their record low of 0.5 per cent. Although salaries have increased year-on-year, the marginal month-on-month decrease in pay is further indication of a wider hesitancy in confidence.”
“Amid this lull in hiring activity, the one clear exception is the financial services industry. Although George Osborne has warned of “tens of thousands” of potential job losses in the sector if Britain leaves the EU – claiming that 285,000 jobs in the sector are linked to business with Europe – it seems that the current landscape means that hirers in this area cannot afford the luxury of breathing space to reassess talent needs. The pace of change surrounding legislation and technology, as well as several high-profile relocations, means that continual hiring of specialist skill-sets is required just to keep the sector’s wheels in motion.”
Contract vacancies hold steady
Temporary and contract vacancies have increased across the professional staffing market with opportunities up by 1% year-on-year. Demand within finance and accounting was particularly strong, with vacancies increasing by 29%. This can most likely be attributed to increases in workload in the run up to the 2015/16 financial year-end.
“According to official figures, the number of self-employed people in the UK increased again by 182,000 in the three months to March. This means there are now 4.69 million self-employed people in the country, accounting for 15% of the workforce. Consequently, as we have long anticipated, vacancy swing for temporary roles is now more closely aligned to those for permanent roles, rather than acting as a bellwether for future recruitment trends.”
Freelancers contributed £109bn to the UK economy in 2015 and this trend for flexible working shows no sign of abating, with a recent survey from the Association of Independent Professionals and the Self Employed (IPSE) finding that over two thirds (68%) of UK freelancers are as or more confident in their business’ performance for the year ahead than they were last year. The professional staffing sector, as you would expect, is working with employers to respond to this shifting recruitment landscape.”
John Nurthen, Executive Director, Global Research for Staffing Industry Analysts, which compiles the report for APSCo, comments:
“The EU referendum is conveniently taking the blame in many quarters for the recent softening in economic performance, however, this could mask a fundamental weakness in the UK economy. As well as GDP growth easing in Q1 2016 and further easing forecast in Q2, business investment has fallen, manufacturing and construction have slumped, and growth remains reliant on consumer spending. Against this background, a modest 1% increase in permanent and contract vacancies compared to the prior year sounds like a pretty good result. Nevertheless, the increase in professional vacancies, has noticeably softened since the autumn and we’ll have to wait until we get past the 23 June to see how much the referendum is truly to blame for this weakness.”