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January 2021: The Starting Line

  • Publish Date: Posted over 3 years ago

The new year is always a good time to take stock of what is going on around you. The jobs market is always a good place to start, giving you an indication of the shape of the world around you and of what is potentially ahead. So, what does the jobs market look like heading into 2021? We take a look at the REC’s latest Report on Jobs.

Temporary market

The temporary recruitment market gained strength throughout 2020, with hiring confidence low, businesses turned to a more temporary solution to their skills shortages. This trend hit its peak in the run up to Christmas with temporary billings in December expanding at the sharpest pace since October 2018. This combined with the fact that online spending over the Christmas Period increased by 65% more than 2019, reflects the strength of the British economy and offers some hope for the future.

Of course, rises in demand for temporary staff are isolated to specific industries, notably nursing, medical and care related sectors, followed by Blue Collar and then Engineering and Construction. A trend that is to be expected during a pandemic.

Higher staff availability since the first national lockdown in March 2020 has led to a stagnation of wages for temporary workers, with only more skilled/experienced roles seeing an overall increase in pay during the latter end of 2020. This is set to get an uplift this year as NLW increases in April.

Permanent market

For much of 2020, the permanent hiring market declined. Hiring confidence took a nose-dive, with no one really knowing what was going to happen next. However, there was a positive shift in December 2020 with increases in permanent staff appointments driven by increased market activity and greater hiring confidence due to the news of the vaccine. It remains to be seen if this increase has been sustained despite the National Lockdown, however, at Select we have seen a positive shift in employer’s looking to hire permanent staff in preparation for 2021.

Predictions for 2021: A changing landscape

There are currently 9.9 million people in the UK on the Coronavirus Job Retention Scheme, which has been extended until 30th April 2021. This scheme has prevented job losses occurring en masse but as businesses – especially those in sectors like travel and retail – suffer, thousands of jobs are already being cut. The latest unemployment rate was measured at 4.9% (Aug to Oct 2020) an increase of 0.7% over the previous three months. This equates to 1.69 million unemployed people. With a lockdown in force for the foreseeable future, this figure is likely to have risen and will continue to rise for at least the first half of 2021.

It is not all doom and gloom. The latest Employment Outlook Survey conducted by ManpowerGroup shows a rise in employer confidence heading into 2021 compared to midway through 2020. It is also worth bearing in mind that as a nation, as businesses and as people we have learned a lot this year and although we have all experienced a lot of upheaval, some of the lessons we have learned may prove to be beneficial.

Firstly, we are already seeing a move away from the London-centric economy, with more flexible working policies in effect now and moving forward. This means that more opportunities are going to open to more people as you do not have to live in the locality anymore. Secondly, a reduction in the number of people commuting is also proving to not only be better on the pocket and on the environment, but also on our wellbeing, with more people able to use this time productively.

Thirdly, fast advances in communication technology and its expanding user base are bringing together communities that would otherwise be isolated from one another. In fact, due to necessity, many companies have accelerated the digitisation of their operations by three to four years according to a McKinsey Global Survey of executives; encouraging collaboration across teams and people as well as offering social benefits too.

Further considerations

COVID is not the only thing that is going to affect the jobs market heavily this year. Brexit is going to prove to be another large hurdle. Changes to immigration are going to hit the manufacturing and farming sectors particularly hard and Logistics businesses are under extra pressure to navigate new import and export rules. IR35 is also worth consideration as it is going to have a profound impact on contractors and businesses that employ contractors (read more about the impact on jobs of Brexit and IR35).

With the number of candidates on the market likely to rise and competition for each role to become tougher, now is the best time to get in touch with a good recruiter. At Select, we can not only offer remote interviewing and shortlisting technology for our clients to dramatically cut the amount of time to hire, but we can also offer our candidates a personal recruitment experience. Get in touch today to find out how we can help you.

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