24.04.2023

New data shows uptick in recruitment following Budget: but will it last?

Hiring picked up across the UK in March as the Chancellor’s skills focused Budget announcement boosted confidence across businesses, but success could be short-lived. That’s according to the latest statistics from the Association of Professional Staffing Companies (APSCo) – the trade body for the professional recruitment sector.The data - provided by the global leader in software for the staffing industry, Bullhorn – revealed that permanent jobs grew 10% month-on-month in March while demand for highly skilled contractors rose 4%. Placements also increased, up 21% for permanent jobs and 11% for contract positions between February and March.This is no doubt driven by an uptick in business confidence following the skills focused Budget announced mid-March and reports from the Office for Budget Responsibility (OBR) stating that the UK will avoid a recession this year.Annual drop isn’t cause for concern – yet!The statistics also show that jobs have fallen year-on-year with permanent vacancies dropping 27%, while contractor roles were down 31% between March 2022 and March 2023. However, this fall is in line with the recruitment market stabilising following the record recruitment levels noted by the Office for National Statistics (ONS) this time last year.According to APSCo, this fall isn’t yet a cause for concern, but unless pressing skills issues are addressed, the recruitment landscape across the UK could soon face extreme challenges.Tania Bowers, Global Public Policy Director at APSCo comments: “The monthly increases in hiring activity noted in March are a positive sign that general confidence in the UK economy is on the up again. Reports that we will likely avoid a recession this year will have no doubt influenced this, as will the Chancellor’s Budget which was broadly welcomed, albeit with some actions missing from the plans outlined.“While at APSCo we’re optimistic about the recruitment landscape for the months ahead, we remain concerned that the skills shortages facing the country are still growing faster than solutions are being implemented. An overnight solution isn’t viable given the breadth of the dearth of talent, however there are elements that have been overlooked. As a case in point, the current scope of the use of Apprenticeship Levy funds is too narrow and isn’t fit for purpose in a flexible employment landscape. A broader skills levy which accommodates modular training, access to training for independent professionals and the self-employed, and enabling the levy to be used to fund flexi-apprenticeships for agency workers is needed.“Where resources cannot immediately be found in the domestic market, the country’s employers also need an attractive route of employment for global talent. The current Tier 5 and fast track visa schemes are too narrow in focus and funding needs to be increased for the Home Office to both support existing systems and drive new visa routes which are more viable for highly skilled, self-employed project workers. We might be seeing positive trends in the recruitment market, but without the skills needed to fill these roles, progress will be limited to say the least.”

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