Q4 2023 Recruitment Trends Report: The impact of flexible working on recruitment
In our Q4 2023 Recruitment Trends Report, we detail jobs and applications data that reveals the state of the UK’s labour market in the fourth and final quarter of the year. Applications increase to their highest figures of 2023 and jobs slow but do not plummet.
We also dig into data that illustrates the evolution of flexible working from pre-pandemic years up until now. It’s a deep dive into how much flexible working has changed – and continues to change – the fabric of the labour market, how it’s impacted recruitment, and what we might see in 2024 and beyond.
Q4: Applications increase on the quarter whilst jobs stall
Q4 was a busy quarter, especially considering activity tends to wane as the year closes. Applications were the highest of any quarter in 2023 and jobs equalled the 2022 quarterly average. What they didn’t equal was the pace of growth – an indication that as the year ended, the market was re-setting, shifting the balance from candidate-led to a more even keel between candidate and employer.
Applications continued their upwards trajectory in Q4, reaching 54% over the quarterly average for 2022 and a 22% increase on the previous quarter.
Jobs equalled the 2022 quarterly average and decreased on Q3, although only by 1%.
The average application per job in Q4 was 17, a rise of 3 from Q3.
IT & Internet received the largest percentage of applications in Q4 but Education took the top spot for jobs posted.
Monday was the most active day in recruitment in Q4, with the first day of the working week being the day that the the majority of jobs were posted as well as the majority of applications received.
October saw the most applications of Q4 (and in fact the entire year) but the highest percentage of jobs were posted in November.
Job posting and applications per month
Following a lacklustre Q3 in terms of applications, Q4 was a busy quarter for candidates. October recorded the highest percentage of applications all year, hitting 66% over the 2022 monthly average. November’s numbers dipped slightly but still equated to the second highest of the year. As the year came to an end we usually expect all recruitment activity to fall dramatically but applications only dropped to 38% over the 2022 monthly average, which puts the figures in the top half for the year.
Jobs remained fairly steady in October and November but dropped by quite a margin in December – a seasonal trend but one that makes the consistently high application numbers all the more noteworthy. It seems the market is resetting after the crazy hiring rush of 2021/2022. Jobs are staying at a fairly even keel but applications are increasing – not a bad situation for recruiters. And with the cost of living still an issue for many, we can expect application numbers to remain high as we head into 2024.
Job posting & applications by quarter
The headlines in the press in 2023 consistently lamented falling jobs in the UK’s labour market. However, that is not what Wave data has found. Other than a slight fall in Q2, jobs have remained at a fairly consistent level, akin to the 2022 quarterly average. What this indicates is a levelling out of the market. The pace of jobs has fallen from the hiring surges immediately following the pandemic but job numbers have remained at a consistent level.
Meanwhile, applications remain high. In each quarter across 2023, they rise well above the 2022 quarterly average, peaking in Q4 at 54% above it. We have certainly seen more candidates entering the market in Q4, some as they take on second jobs to help with the cost of living, others coming out of retirement for similar reasons. An increase in hybrid jobs on the market may have helped a range of candidates that would struggle to work a full time office job (eg carers, parents, those with neurodivergencies or disabilities) to enter or re-enter the market. Seasonal jobs generally push up application figures but as jobs fell slightly in Q4 that may not be such a reason this year.
Industries with most jobs and applications
Education has stormed into the top spot for volume of jobs posted in Q4, taking the lead from IT & Internet. From 15% of all jobs in Q3 to 26% in Q4 and 8 percentage points ahead of IT & Internet, Q4 was a busy period for the Education industry. Given its busiest period tends to be Q2, when schools are lining up staff for the start of the new academic year in September, this is significant. However, the industry is also joint top for applications, indicating that supply is likely meeting demand.
IT & Internet remains an incredibly active industry, in the top 2 for both jobs posted and applications received. Health & Nursing, Manufacturing and Public Sector & Services all remain in the top 5 for jobs posted but only Manufacturing from that trio is also pulling in the applications. This suggests that Health & Nursing and Public Sector & Services are both still experiencing labour shortages. Meanwhile, Engineering & Utilities and Secretarial, PAs & Admin are both receiving a relatively high number of applications but without the job numbers to match.
Average application per job by industry
With an increase in seasonal jobs and a need by many to take on a second job in the run-up to Christmas, it’s perhaps unsurprising that Retail & Wholesale racked up an average of 109 applications per job in Q4. Roles in the industry can also fit around other jobs as they include evening and weekend work, a trait Retail shares with Customer Service, which received the second highest average number of applications per job in Q4 (73). Also in the top 5 is Banking (the highest in Q3), Recruitment Sales (perhaps as a result of redundancies in certain areas of the industry in the latter half of the year), and Secretarial, PAs & Admin.
Health & Nursing yet again finds itself receiving the lowest average number of applications per job – just 1. The historic skills shortages the industry shares with Public Sector & Services (also in the bottom 5) has meant consistently low application numbers. At an average of just 3 applications per job, Electronics has the second lowest average numbers of applications per job across all industries, something that could be attributed to a skills shortage in the industry, highlighted by this McKinsey report.
Average application per job board
The order of the job boards producing the highest average numbers of applications per job haven’t changed, although the numbers have. JobServe comes out on top with very similar numbers in Q4 to Q3 (97 and 96 respectively). Caterer received the next highest, but at 83 in Q4 from 41 in Q3, it more than doubled its average application per job figures, likely due to an increase in demand in the lead-up to the festive period. Secs in the City came in 3rd, with an average of 44 applications per job – 4 over their Q3 figures.
The first generalist job board to chart is Totaljobs, with an average of just over half of Secs in the City’s figures. CV-Library and Reed.co.uk – the next 2 generalist job boards – received an average of 13 and 12 applications per job.
The impact of flexible working on the recruitment industry
The flexible working journey only really picked up pace when the world was turned upside down by the COVID-19 pandemic. In 2019, flexible working was virtually unheard of outside of part-time work, though there was a growing movement for change. Wave held a Talent Matters event focusing on the huge benefits of flexible working in February 2020, not knowing that just a month later we would all be told to stay at home and that flexible working would be about to undergo a globally enforced trial on a macro scale.
In 2020 most of us worked from home. In 2021 there were tentative steps back to the office. In 2022 businesses tried to work out what worked best for them – remote, hybrid or back to the office 5 days a week – though not many were enforcing the latter. In 2023, we’ve seen a big shift in companies mandating a return to the office, whether for 2 or 3 days or full time. Why are they making a U-turn? A perceived lack of productivity, a concern that mentoring and proximity learning will be impacted, just because they can now that the pendulum is slowly shifting towards employers once more – all of these reasons have been given.
Yet, survey after survey tells us that this is not what employees and candidates want. And surveys on the recruiter side are suggesting that jobs advertising some form of flexible working result in more applications. In 2024 there will also be the added impetus of a law that gives employees the legal right to request flexible working from day one on the job. It seems employees and candidates are pushing harder for flexible working while businesses are simultaneously moving in the other direction, away from truly flexible working. There is clearly a huge disconnect here and it will be interesting to see how this plays out in 2024.
Here, we look at how flexible working has grown from 2018, in what area it’s declining, which industries are flexible working champions and what candidates and employees really want.
The growth of flexible working
It’s when we dig into our data that we gain a clearer picture of what’s going on in terms of the flexibility that’s being offered in jobs and there’s a clear evolution across the years from 2018 up to 2023. From the pre-pandemic years of traditional working models, we see heady growth in flexible working in 2020 up until 2023 when all but hybrid jobs decline in 2023. Have we reached a turning point in the flexible working narrative?
The rise and fall of flexible working jobs
In the graph plotting all jobs that are advertised with any flexible working terms, we can see that in the pre-pandemic years of 2018 and 2019 they accounted for just 1.1% and 1.3% respectively. Roll on to 2020, when the world of work was changed forever by the consequences of the stay at home mandate, and that figure rises to 3.1% – triple that of 2018. Flexible working jobs then keep rising, up to 6.1% in 2021, peaking at 7.5% in 2022.
However, in 2023 jobs advertised with flexible working terms drop to 5.4%, the lowest they’ve been since 2020. This shift seems to prove what has been reported at length in the news – a corporate back-pedalling on flexible working.
After a plethora of businesses publicly announced their flexible working policies in the immediate aftermath of the pandemic – prompting many employees to make big life decisions such as moving further away from the office – 2023 seemed to be the year that reversals in policy were made. Some of the biggest companies in the world – Apple, Amazon, Disney, Google, Zoom, and Meta, to name but a few – began to mandate that employees returned to the office. With an increase in the unemployment rate and Wave data showing an uptick in applications in Q3 and Q4, there appear to be the beginnings of a shift in the power balance back towards employers.
2023: the year of hybrid working
What is interesting is that, when you look at our flexible working data at a more granular level, separating out some of the different types of location-based flexibility, there is one form that bucks the trend. Hybrid jobs are the only form of location-based flexible working that increased in 2023. In fact, they barely made the graph until 2022 but then continued to grow in 2023. Looking at the ‘Flexible Jobs Trend’ graph above, this becomes even clearer. Working from home and remote jobs both dip in 2023, with only hybrid jobs continuing an upwards trajectory.
This is likely partly due to an uptick in the adoption of the term ‘hybrid’ but is undoubtedly also a reflection of the fact that hybrid working has become the compromise that best works for the majority of employers and employees. What hybrid means will differ from organisation to organisation – it might mean a set 2 or 3 days in the office, or the ability to come into the office on days that suit each individual employee or even just certain days of the month that all employees come together. And this continues to be defined and redefined across the world of work as we all figure out the best solution.
The industries that champion flexible working
As predicted, some industries have adopted flexible working practices more than others. Similar industries crop up over all forms of flexible working but IT & Internet and Education are posting by far the highest numbers of flexible working jobs.
Location flexibility by industry
Location flexibility is what many people think of when conversations around flexible working arise. This could be remote, hybrid, work from anywhere, or a number of other possibilities. We’ve analysed the data on jobs advertising flexible working/remote/working from home and hybrid across different industries.
IT & Internet dominate when it comes to flexible working/remote/working from home jobs, advertising 65% of all such jobs. The industry also advertises 43% of all hybrid jobs. As a predominantly virtual sector, it’s an industry with many roles that can be worked flexibly. It’s also an industry with a high number of jobs, so those jobs need to be competitive and appealing to candidates.
Education advertised the second highest percentage of flexible/remote/working from home jobs, although at 7.6% it was significantly lower than IT & Internet. Accountancy – another industry with a high proportion of roles that can easily be worked flexibly – also advertised a larger percentage of all forms of flexible working jobs. Public Sector & Services, an industry that consistently finds itself amongst the 5 industries receiving the lowest average numbers of applications per job, also charts relatively highly for hybrid jobs. As an industry that can offer flexibility, it is likely using the lure of flexible working to try and attract candidates to its jobs.
Time flexibility by industry
When flexibility is discussed it’s often done so with location flexibility in mind, i.e. where you work. However, flexible working can span a range of different mediums, including time flexibility. Here, we’ve looked at industries advertising part-time jobs and those advertising contract jobs.
Education dominated both categories but particularly part-time jobs, accounting for 48% of all part-time jobs advertised. A growing number of teaching staff and those in administrative roles in educational settings now job share, which is helping to fill vacancies in an industry dogged with skills shortages. Education also advertised 30% of all contract jobs, likely due to demand for high number of substitute teachers and educational consultants. It’s also a cost-effective solution for an industry facing mounting budgetary pressures.
Secretarial, PAs & Admin – an industry that has historically been known for offering part-time roles – advertised the second highest percentage of both part-time and contract jobs. This makes it a great industry for working parents that need more time flexibility and older workers that want to continue working but not full-time. Also advertising a relatively high percentage of part-time jobs is Transport & Logistics, an industry popular with those taking on second jobs, which many people had to do in 2023 thanks to the increasing cost of living.
Flexible working – a huge candidate motivator
Some organisations may be doing a U-turn on flexible working but the reality is that it is a huge draw for candidates. In fact, more than that – withdrawing flexible working options and mandating a return to the office can be a huge motivator to start searching for another job. In a survey of recruiters carried out by Wave, a huge 90% of respondents said that they receive a greater number of applications for jobs with flexible working.
2023 Totaljobs research found flexible working hours to be the most sought after benefit and LinkedIn data has consistently found flexibility to be amongst the top three candidate motivators when looking for a job. A Deloitte survey found that, among respondents who still work remotely at least part-time, 66% would likely leave their current role if mandated to return to the office five days a week. Although there may be more candidates in the market now and the pace of jobs has slowed, there remains a skills mis-match, meaning that attracting the right candidates for your jobs could still be challenging in 2024. Ignoring what a huge percentage of the market wants from a job could be hugely damaging.
An evolving journey
The pandemic was the catalyst for a change to the way we work, the likes of which we hadn’t seen since the Industrial Revolution. We’re feeling our way through how flexible working works in different industries, across different roles and for different people, and that journey is ongoing. Meanwhile, we can be sure of two things: one, that we will never go back to 9 to 5 in the office, 5 days a week as the norm, and two, that flexible working will continue to evolve through 2024 and beyond.
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