Professional services vacancies in the UK declined by 9% in November, marking an end to a 10-month hiring spree, but hiring in all sectors continues to hit new peaks.
Numbers of vacancies had been increasing in each month of 2021, by 6% each month (an average of 32,377 new vacancies each month), according to professional services recruiter Robert Walters, but vacancy numbers in November fell back to a level last seen in May.
The biggest contraction in November was in northern England (-14%) – following the announcement that the HS2 northern rail link would be downgraded. Contractions were also felt in the South (-10%), London (-9%), and the Midlands (-8%).
The fall in vacancies was not a surprise to Chris Poole, managing director of Robert Walters. He said that following the reopening of many sectors post-lockdown “businesses made immediate staffing assessments based on people leaving or not returning, which in-turn led to a short-term spike in hiring that was always going to be temporary”.
He added: “The emergence of a new variant has yet again left members of parliament sitting on either side of the lockdown argument – creating a lingering air of uncertainty across businesses, particularly within the retail, leisure and hospitality space.”
Nationally, the analysis showed professional vacancies were up 110% on 2020 and 55% up when compared with 2019 pre-pandemic numbers. With that, June 2021 was the record month across the period with almost three times the number of vacancies compared with June 2020 (+263%), and over 60% more jobs when compared with June 2019.
Meanwhile, hiring activity has continued to increase, despite the softening vacancy rates and falling candidate supply, found the KPMG and REC Report on Jobs survey published today (9 December).
This “notable imbalance between the supply and demand for workers” has led to further increases in starting pay. The rate of starting salary inflation hit a fresh record in November.
Last month saw permanent placements rising at a sharper rate than in October, the fifth-quickest on record, with IT and computing posted the steepest increase in demand for permanent staff during November, followed closely by hotels and catering. The softest rise in permanent vacancies was seen in the retail sector.
Temporary vacancies rose in November, led by hospitality, while retail recorded the slowest increase in short-term vacancies.
The current trajectory is unsustainable in the long run for businesses and the wider economic recovery” – Claire Warnes, KPMG UK
Claire Warnes, head of education, skills and productivity at KPMG UK, said: “The pace of demand for workers is running far faster than supply can keep up with, which is draining an already diminished pool of available talent and feeding into inflationary pressures.
“The current trajectory is unsustainable in the long run for businesses and the wider economic recovery. The priority must be to replenish the workforce and ensure businesses can access the talent they need.”
It was too early to predict what the effect of the Omicron Covid variant would be on the labour market, said Neil Carberry, chief executive of the REC, adding: “December may be slower than previous months as its [Omicron’s] effects feed through. Hospitality will be in the forefront of any changes as we approach the festive season, of course, and the impact of high inflation will also be felt as purses tighten in January.”
The Robert Walters study – part of its 2022 salary guide – found that vacancies within the accounting sector had reverted to 2019 levels, however the increase this year has been primarily from outside the big four accounting firms. In 2019 about 77% of all accountancy vacancies come from the big four, whereas in 2021 (year to date) this has dropped to 69%.
In professional services, there was particularly strong demand for roles around with vacancies up 30% on 2019 – as the government continues to discuss changing taxes to help plug rising costs around Covid and social care. Financial services roles continue to be at record levels – with vacancies up by 76% on average since 2020, and by 30% when compared with 2019 levels.
The legal sector has also had a record year, the analysis revealed, with hiring having already surpassed pre-pandemic 2019 levels by 23%, with one month left on the year.