How Coronavirus has changed the state of the jobs market
Rewind to February and the UK’s employment rate was at a record high. According to figures recently published by the Office for National Statistics, in the three months up to February 2020, the employment rate reached a record 76.6%. The jobs market was buoyant. Nobody could have predicted that just a month later everything would change. Fast forward to May and the focus for many employers, especially in those industries hardest hit by the coronavirus outbreak, is to safeguard existing roles and employees rather than creating new jobs and searching for talent.
The figures WaveTrackR is recording for jobs posted over the past month make startling reading. The week from 27th April to 3rd May saw a record low number of jobs posted for 2020, down to -82% from the average in 2020 before March. Applications have also dipped from their pre-March average but only to -18%, quite a significant percentage difference from the job posting drop, indicating that for the first time in several years it is no longer a candidate’s market. Many of the UK’s largest employers have cancelled or at least postponed recruitment drives and over 25% of companies surveyed by the Institute of Student Employers admitted they will likely hire far fewer graduates.
A report by the Institute for Employment Studies (IES), using data collected by Adzuna, recorded similar findings. Job vacancies have fallen by over 50% since the start of lockdown, with a report published earlier in April finding the hospitality and catering sectors falling by a massive 70%. Given the enforced closure of pubs, restaurants and bars that is perhaps unsurprising even if it does make alarming reading. However, the IES found that a high decrease in vacancies was not contained to the industries most affected by the pandemic. Sectors including HR and recruitment, PR, energy, charity work, and administration also saw a huge drop of more than 60% in vacancies.
By contrast, WaveTrackR data shows that, bar a dip towards the end of April, the average number of applications per job is steadily increasing week on week, to a 2020 high of 42. Compare that figure to pre-lockdown application numbers which rarely rose above 10 per job and it’s clear that the jobs market has changed considerably since the heady vacancy-rich days of the beginning of the year. Of course, not every sector is on a hiring freeze. The IES report found that vacancies in the social work and cleaning sectors rose and healthcare only slightly dropped. In fact, these three sectors together accounted for a quarter of the total number of vacancies being advertised. Logistics, warehousing and retail are all actively hiring too. And this is where recruiters can help candidates. Transferrable skills have never been more important. Look at what candidates’ skills could be used for, outside the industries they have direct experience in. The IES report also found that there remains close to half a million live vacancies and as an industry we can help those without jobs to fill those vacancies and keep the UK moving.
For recruitment companies that target those industries that are struggling, temporary or contract positions could be an option in the short term. That way businesses can keep going with the resources they need but without the financial investment of permanent hires. Given the lack of jobs available in the market, many candidates are likely to be willing to be more flexible when it comes to employment contracts. Of course, there are clearly many businesses which are in no position to make any sort of hires, and probably won’t for some time to come. A large number are simply trying to stay afloat and many will feel the impact of the virus for months or even years after lockdown has ended.
What will be the future of the recruitment industry? Nothing is certain in these uncertain times. However, there’s little doubt that the switch from the market being one that is candidate-driven to one that is steadily filling with applicants is going to last for some time. With the prospect of the lockdown being partially eased soon and businesses starting to return to some sense of normality (or at least a ‘new norm’), hiring could start to increase. The positive news for recruiters is that there will be a dearth of talent to choose from. In the weeks and months to come the recruitment industry will have a big part to play in the UK’s economic recovery as it helps to get the nation back to work again.