Home Business News UK job market faces one of the most difficult starts to the year in four years

UK job market faces one of the most difficult starts to the year in four years

by LLB staff reporter
29th Jan 24 9:36 am

The UK jobs market experienced its biggest monthly fall in vacancies in over three years in December, as business confidence in the UK continues to contract according to the UK Job Market Report by job search engine Adzuna.

Total advertised job vacancies dropped -6.95% in December to 929,138, the second month in a row that the total vacancies are lower than 1 million.

Early data also anticipates that January could be equally tough, with vacancies expected to decrease again, by between -6% and -8%. The last time job vacancies fell this dramatically was in June 2020 when monthly vacancies dropped -18.14% as businesses struggled to get to grips with the effects of the Covid-19 pandemic.

The fall in vacancies also means competition for jobs is now the highest it’s been since September 2021, at 1.68 jobseekers per vacancy. This is compared to May and June when it was at its 2023 lowest, at 1.45.

This paints a difficult picture for people looking for new roles this new year. However, it’s not all bad, with average advertised salaries on the rise, up +0.96% monthly to £37,577, and up +2.28% on an annual basis. This may point to a lack of entry-level or junior positions available, with companies hiring only for more senior roles.

More job adverts are neglecting to include salary data (50.2%) compared to those that do. This makes it hard for potential candidates to understand the seniority of a role and if it is relevant for them to apply for.

Teaching hiring remains strong despite widespread falls

Teaching was the only sector to experience a rise in monthly job vacancies in December, up +4.39% compared to November and an increase of +38.32% compared to 2022’s figures. Teaching was also the sector with the shortest time to fill for roles, at 30.9 days on average, up from 37.8 the previous month, whilst the average for all sectors was 35.6 days.

Every other sector saw a monthly fall in advertised job vacancies throughout December, with the biggest falls in Retail (-17.94%), Manufacturing (-17.05%), Hospitality & Catering (-14.13%) and Trade & Construction (-13.56%).

The availability of Graduate roles has also continued to suffer with live job advertisements down -8.4% compared to November. The sector also takes the longest to fill roles, on average 47.2 days, which points to high competition in the sector for a smaller number of available opportunities.

When compared to last year’s figures, HR & Recruitment vacancies have fallen the most, down -43.38% to 10,127 roles, followed by IT jobs which are down -35.34% to 90,507. The smallest fall was in Engineering, which has seen vacancies drop only -3.48% compared to the same time last year. Despite the fall in advertised vacancies, it’s still one of the biggest hiring sectors on the Adzuna platform with 83,339 available jobs.

Due to positive growth in average advertised salaries in the UK, there was almost widespread growth in sector salaries. The biggest increases were in Creative & Design jobs, up +2.15% to £39,112 and Retail jobs, up +2.19% to £28,097.

IT and Maintenance were the only two sectors to see average advertised salaries fall -1% and -1.65% respectively. IT advertised salaries were also down -8.66% on an annual basis. Whilst this may seem like more bad news for the IT sector, this was one of the smallest decreases in salaries the sector has experienced in the past year, demonstrating that fortunes may be turning.

Social Work jobs saw the biggest increase in advertised salaries compared to the same time last year, up +11.54% to £34,446, followed by Travel, up +10.77% to £32,276, and Energy, Oil & Gas, up +10.69% to £44,949.

East Midlands has experienced the highest annual increase in salaries compared to December 2022, up +7.14% to £34,423, followed by Eastern England, up +4.5% to £36,141. It’s interesting to see Northern Ireland fall so far down the table, with only a modest +2.81% increase in annual salaries.

Usually, the region has been one of the top three for salary growth throughout 2023, often driven by high average salaries in Belfast. However annual advertised salaries have fallen -5.3% in the city compared to last year.

London’s salary decrease is slowing further, down to -0.04%, compared to -2.02% in November, pointing to improved salary performance in the capital.

Cambridge continues to be top for jobhunters

Cambridge has remained on top as the best city to find a job, with low competition rates: there are 0.3 jobseekers for 7,383 vacancies, a status it has maintained throughout 2023. This is followed by Oxford (0.63) and Reading (0.73).

On the other side of the scale, Bradford has maintained its position as the most competitive city for jobseekers with 6.53 jobseekers competing for 2,831 vacancies. This has continued to increase as overall vacancy numbers have fallen. This is followed by Birmingham (3.54) and Sunderland (3.04).

Warehouse jobs are most searched for

Continuing a trend experienced throughout 2023, warehouse work is the top trending job on Adzuna’s Intelligence Portal for the seventh month in a row. This metric tracks demand for a wide range of occupations and designates an Interest Quotient for each role. The higher the quotient, the more in demand those roles are among Adzuna jobseekers.

Lorry driving roles came second, followed by Social Care Worker roles.

Andrew Hunter, co-founder of Adzuna, said, “Jobseekers hoping for a positive start to the year won’t be happy to see December’s data with roles down nearly 7% compared to November and nearly 13% compared to the same time in 2022.

“This will likely continue into January with data so far indicating that jobs are expected to drop further before they begin picking up.

“Yet salaries have remained strong despite the dip in vacancies, particularly in the regions where the East Midlands is continuing to experience some of the highest annual growth rates. The tide appears to be turning for the IT sector too with negative growth slowing, which is good to see considering it is an ever-growing employer in the UK.”

Tony Wilson, Director at the Institute for Employment Studies, added, “Hiring is clearly slowing down, but worryingly this data also suggests that there’s been little if any rebound in activity in the new year.

“Ordinarily, we would expect quite a strong bounce back in recruitment after Christmas, but the fact that this hasn’t happened this year suggests that a lot of firms are holding back given wider uncertainty in the economy or are themselves feeling the pinch as people rein in their spending.

“Either way, this doesn’t suggest a great start to the year in the labour market.”

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