After the Coronavirus lockdown placed the labour market on pause, opportunities for contractors in April and May declined dramatically as businesses shut their doors, postponing or cancelling hiring plans. But even so, and despite what has been described as two of the worst hiring months on record, staffing experts have said things are beginning to look up.
This is the opinion of the Recruitment Employment Confederation (REC) and KPMG, that published their latest hiring data in the monthly UK Report on Jobs. Whilst the statistics demonstrate that Coronavirus continued to “weigh heavily on recruitment activity” in May, as lockdown restrictions remained in place, a slight upturn in business confidence signals that the “worst may be behind us”.
We’ll now examine the report’s key findings.
Placements fall again
Contractor and permanent placements fell at a substantial pace in May, at the “second-sharpest rate on record”. Incidentally, the worst rate in the report’s 22 year history was experienced in April.
It’s not all bad news, though. Permanent placements fell faster than temporary billings, while REC’s Chief Executive, Neil Carberry, said recruiters are now feeling more upbeat.
“Given the impact of the lockdown in early May, it’s no surprise that these figures look bleak. But in the two weeks since this data was collected, lockdown rules have been eased and the feedback we get from recruiters every day suggests that the slight improvements that we can see in the placements and vacancies data have continued.
Mr Carberry also added: “I’m also hearing from business leaders all over the country that things are starting to look up. There is a long way to go, but it’s time to talk about how we recover from this crisis”.
Candidate availability rises
Following significant hiring hesitation, the number of candidates available for work increased at its quickest rate in 11 years. KPMG’s Vice Chair, James Stewart, said this rise in candidate supply has made the current jobs market “highly competitive”. Focusing on the months ahead, Mr Stewart took the view that “adaptability will be the key to success for jobseekers in 2020”.
Rates of pay impacted
Last month, rates of pay for workers fell at a sharp and accelerated pace. The report states that Coronavirus has led to weakened budgets, leading businesses to renegotiate rates with both contract and permanent staff. This was seen across all four monitored English regions, with London suffering the most.
Drop in demand for talent softens
While uncertainty caused by Coronavirus resulted in “marked drops in demand for both permanent and short-term staff in May”, the rate of contraction has at least eased, when compared to April. Also worth noting is that short-term demand for staff increased marginally between April and May. According to REC and KPMG, this suggests there is light at the end of the tunnel.
Hiring confidence grows
Admittedly, employers’ confidence in the economy sat at an all-time low, but short and longer-term hiring intentions are encouraging. Granted, whilst this remains in negative territory (-10), ‘hiring confidence’ improved by 11% in May. This is boosted further by employers’ plans to hire staff in the next 4 to 12 months, with confidence at +6 for temporary and permanent staff. REC and KPMG are “sure that firms will start to hire staff in the coming months, and the economy will recover as they do”.
So while the impact of Coronavirus on temporary recruitment is there for all to see, the fact that businesses are beginning to focus on the post-Coronavirus market is a positive development at a difficult time.
With you all the way
We're glad to see even these small glimmers of hope for the industry. Whatever is in store in the future, you can be sure that our expert team at Parasol are here to support our recruitment partners and contractors all the way.
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