The UK labour market is starting to thaw, with recruiters reporting the strongest rebound in permanent hiring for six years in March as businesses prepared for the lifting of lockdown measures.
A monthly survey, compiled by IHS Markit for advisory firm KPMG and the Recruitment & Employment Confederation, pointed to the first upturn in permanent staff appointments since December, with the highest proportion of recruiters since April 2015 reporting month-on-month growth.
Recruiters also reported accelerating growth in temporary billings, and the sharpest increase in overall vacancies since 2018.
The survey is one of the strongest signals so far that businesses are becoming upbeat enough to take on new staff now that the government has laid out a road map for reopening the economy from lockdown.
The latest official data showed employers had put hiring plans on ice over the winter, with the number of vacancies stuck well below pre-pandemic levels, but real-time data published by the Office for National Statistics suggests online job adverts have now risen to levels seen on the eve of the first lockdown.
“Even during lockdown, our labour market was bouncing back,” said Neil Carberry, chief executive of the REC, adding that the first signs of a recovery in London’s job market was “a sign that business confidence is starting to flow back”.
A sustained recovery in hiring will be crucial if the UK is to rebound from the pandemic without severe economic “scarring”. So far, the government’s furlough scheme has helped limit job losses, with the unemployment rate edging down to 5 per cent even during the renewed winter lockdown. But with job openings scarce, those who have lost jobs have found it hard to find new ones, and unemployment has rocketed among young people entering the labour market.
However, recruiters are no longer seeing rising numbers of people chasing the jobs available. Respondents to the KPMG/REC survey said that, while job losses had driven up candidate numbers, fears over job security had made those who were still in work reluctant to seek new roles. Brexit and new rules governing off-payroll working had also led to a decline in candidate numbers for temporary roles.
The KPMG/REC survey showed that the strongest growth in vacancies was for nursing and care jobs, and in the IT sector. However, it also suggested that hospitality businesses were starting to hire again, as well as bringing back workers who had spent much of the last year on furlough.
The only sector where recruiters saw weaker demand for both permanent and temporary staff was retail. However, figures published separately by the job site Indeed showed stronger growth in hiring by retailers in the run-up to next week’s reopening of non-essential shops, with vacancies climbing to within 14 per cent of pre-pandemic levels by the start of April.
Indeed named the fashion brand Primark, which does not sell online, among the non-food retailers posting the most new jobs since February, alongside the shoe chain Clarks. But it said growth in retail vacancies still lagged demand for loading, stocking and driving roles — suggesting that employers did not expect a reversal of the shift to online sales.