UK Job Market Report January
![job market june](https://dovetailrecruitment.co.uk/wp-content/uploads/2021/02/financial-2860753_1920.jpg)
UK Job Market January Report – Main Findings:
Renewed drop in permanent placements amid reintroduction of lockdown measures
Every month we receive the latest figures on the employment market in the South and the UK. The Job Market Report UK for August is kindly provided by IHS Markit, KPMG & REC who gather the key statistics from around 400 UK recruitment and employment consultancies.
KEY FINDINGS OF THE UK JOB MARKET JANUARY REPORT
- Renewed drop in permanent placements amid reintroduction of lockdown measures
- Uncertainty drives further marked rise in temp billings
- Total demand for staff declines solidly
Commenting on the latest survey results, James Stewart, Vice Chair at KPMG, said:
“The latest national lockdown has knocked business confidence, evident by a renewed drop in permanent appointments as businesses put recruitment on hold.
“There has been an uptick in short-term vacancies, but these are mainly in blue collar and the medical response industry, indicating that they are filling a temporary need for staff rather than pointing to long-term job opportunities.
“However, there is cause for optimism as businesses carefully monitor the vaccine rollout and look forward to the Budget next month. It gives the Government the opportunity to further help the recovery in jobs and revive the UK’s productivity growth.”
Neil Carberry, Chief Executive of the Recruitment & Employment Confederation, said:
“Economic uncertainty is weighing on employers’ minds even where they see potential for their own firm to grow, so it’s no surprise that temporary work is leading the jobs recovery. This emphasises again how important flexible forms of work are to helping businesses and public services react to the pandemic. Temporary work is also helping people get back into jobs more quickly after the recent spike in redundancy numbers.
“With the vaccination programme making progress, it’s likely that a path out of the pandemic is emerging. As that happens, we expect a strong recovery in permanent hiring. But businesses need Government help to bridge these last few months. Support for strained corporate cash flows is key. Extending furlough and reducing its cost to firms, supporting family business directors left out of support packages so far, and putting back repayments of deferred VAT and CBILs loans until the recovery would all help enormously.”
STAFF APPOINTMENTS
Marked drop in permanent staff appointments
After rising slightly in December, permanent placements declined during January. Permanent staff appointments have now decreased in three of the past four months. The latest reduction was the sharpest recorded since last June, albeit much softer than the falls seen at the start of the COVID-19 pandemic. Recruiters frequently mentioned that the recent rise in virus cases, renewed national lockdown and weaker market confidence had driven the drop in permanent placements. Data broken down by region indicated that permanent staff appointments fell across all four English regions monitored by the survey. Rates of decline were marked across the board, with the Midlands noting the steepest contraction.
Temp billings growth slips to six-month low
Billings received from the employment of short-term staff across the UK rose for the sixth successive month in January. Though sharp, the rate of increase was the softest seen over this period. Panellists often commented that increased market uncertainty due to the resurgence of COVID-19 had created a preference for short-term workers over permanent staff among clients. There were also mentions of pandemic-related roles being filled, including healthcare workers and cleaners. Temp billings expanded across all four monitored English regions bar London. The Midlands registered the quickest upturn overall.
JOB VACANCIES
Overall vacancies deteriorate at start of 2021
At 45.7, the Total Vacancies Index fell from 50.3 in December and signalled a renewed decline in demand for workers at the start of the year. Notably, the rate of reduction was the steepest since last August and solid. Vacancies have now fallen in three of the past four months.
Permanent and temporary vacancies
Recruitment consultancies signalled a renewed and marked fall in permanent vacancies during January. Furthermore, the rate of contraction was the steepest recorded since last August. Growth of demand for temporary staff meanwhile eased to a five-month low, with vacancies rising modestly overall.
Public & private sector vacancies
Demand for permanent staff declined across both the private and public sectors during January, with the latter registering the steeper rate of contraction. Temporary staff vacancies rose further in the private sector, albeit to a much weaker extent than in December, and were broadly stable in the public sector
STAFF AVAILABILITY
Staff availability expands at slowest pace for ten months
Latest data signalled a further increase in the availability of candidates at the start of the year. Though solid, the rate of growth was the softest recorded in the current ten-month sequence of expansion. Underlying data showed that both permanent and temporary staff supply increased at weaker rates during January
Growth of permanent worker supply eases again in January
Adjusted for seasonal influences, the Permanent Staff Availability Index signalled a sustained increase in the number of candidates available for permanent roles in January. Though solid, the rate of expansion eased further from last August’s near-record pace and was the least marked for ten months. Anecdotal evidence frequently linked the rise to pandemic-related redundancies. At the same time, there were reports of greater market uncertainty having dampened candidate numbers. Softer increases in permanent labour supply were seen across all four monitored English regions. The capital saw the quickest rate of growth.
Temporary candidate numbers rise at softest rate since March 2020
The availability of temporary workers expanded sharply at the start of 2021. This was despite the rate of growth softening to a ten-month low. Recruiters often attributed higher shortterm candidate numbers to company layoffs stemming from the pandemic. However, there were also indications that uncertainty related to COVID-19 and the latest lockdown had weighed on candidates’ appetite for new roles. Three of the four monitored English regions recorded increased temporary staff supply in January, led by London. The Midlands was the only area to register a fall (albeit only slight).
PAY PRESSURES
Fresh decline in permanent starters’ salaries
Recruitment consultancies signalled a renewed drop in starting pay for permanent workers in January. Though only modest, the latest fall marked the ninth time in the past ten months that salaries have fallen. Panel members often linked lower pay to the pandemic and reduced demand for staff. All four monitored English regions noted lower starting salaries during January, with London registering the fastest rate of decline.
Marginal reduction in temp pay
The seasonally adjusted Temporary Wages Index pointed to a decrease in pay for short-term staff in January, after a modest increase at the end of 2020. Nonetheless, the reduction was much weaker than the falls seen throughout much of last year and only marginal. Recruiters often cited greater pressure on clients’ budgets and subdued demand for workers in the latest survey period. The reduction was driven by a substantial fall in temp pay in London, as mild increases were seen elsewhere.
Sources: Thanks as always to IHS Markit, KPMG and REC for the data provided for our UK Job Market Report for January.
Related Dovetail articles:
Business news roundup
Why your business needs marketing
Does Multi-tasking work?
Follow us to keep up to date with The UK Job Market Report, Recruitment + HR news, as well as our latest jobs, career tips + everything else related to your working world.
![]() |
![]() |
![]() |
![]() |