• Recruitment data for the final quarter of 2018 is in. How has the industry fared in the past twelve months?
• Government statistics from the ONS provide further insight to the world we work in.
• Pubs are in decline. What does this mean for recruitment in one of the UK’s most vital sectors?
REC Recruitment Data
The REC publishes its industry analysis amidst another strong year for UK recruitment
The UK recruitment sector succeeded in filling 1.1 million permanent positions in 2017-2018, the Recruitment and Employment Confederation (REC) reports.
The REC Recruitment Industry Trends report also studied the overall health and growth rate across the sector.
Its investigation saw that total industry turnover increased to £35.7 billion. The figure equates to an 11 per cent growth in revenue. Breaking the numbers down, the REC saw that £30.85 billion of the total was made from temporary and contract placements. Permanent hires accounted for £4.84 billion of the remaining amount.
In performance terms, the REC found that the average temporary worker on assignment was up 20 per cent on the year. Contract workers’ average annualised turnover amounted to £34,976.
The average value of each permanent placement was also up, but by the more modest measure of 6.4 per cent. The average value of making a permanent placement was £4,238.
Among temporary and contract workers, there is a clear indication that employers are utilising non-permanent labour to fulfil permanent tasks. 85 per cent of contract workers took placements that lasted for more than three months. Almost half (45 per cent) had assignments for more than six months.
UK recruitment growth is by volume as well as turnover
Perhaps of more immediate interest to agency bosses is the degree by which competition increased this year, however.
The REC found that the number of agencies operating in the UK’s recruiting sector grew by approximately 10 per cent. In the twelve months ending in March 2018, Britain boasted 30,430 separate recruitment enterprises. The sector now accounts for a total workforce of more than 115,000 people.
In an industry already described as the world’s most competitive marketplace, this further, rapid expansion in 2018 may test the margins of agencies that operate within the UK’s tighter locations.
The REC concludes its reports with a set of projections for the coming years. And, while the extraordinary growth of the previous two years is unlikely to be repeated, the prospects are still strong for Britain’s recruiters. The REC forecasts annual growth of 4 per cent in the years 2018-2019. It concludes that this 2019-2020 could return to a higher rate of growth: anticipating a 5 per cent expansion within that time frame.
“It has been an extraordinary year for recruitment and recruiters”, said the REC’s chief executive Neil Carberry, as he summarised the report. “Tight labour markets and quickly shifting skills needs have driven the growth of the industry – but only because recruiters have adapted swiftly to changing times.”
ONS Jobs Market Data
December’s employment data from the ONS highlights further squeeze on recruitment sector
The Office for National Statistics (ONS) has published its UK Labour Market Report for December 2018. The figures, which cover until the end of October, reveal the extent of the squeeze on Britain’s talent market.
Employment has increased to its highest levels in almost half a century, with 32.4 million people in work. This figure was last seen in 1971.
At the same time, net unemployment levelled off: remaining at around 4.1 per cent. Meanwhile, vacancies rose by 40,000 in twelve months. The three months of August to October saw 848,000 positions going unfilled.
Assessing the recruitment impact
In light of these numbers, it is perhaps unsurprising that there are signs that skills shortages are impacting hiring strategies.
The number of workers in full-time positions rose by 110,000 compared to the same period in 2017. In total, this amounts to almost 24 million people.
Part time work slipped during the same period, to 6.2 million: a fall of 38,000 placements.
There is every indication that employers are keen to snap up key skills when they become available. Where the lean market prevents this, companies are increasingly relying on contractors to complete tasks usually intended for permanent members of staff.
Average weekly earnings for employees have also increased. The government figure of 3.3% year-over-year wage growth would amount to the single biggest rise in salaries since November 2008. However, weighted for inflation, the real-terms rise in take-home pay was closer to 1.1 per cent.
“While pay growth is improving at its fastest and most sustained rate in a decade, this is still slower than the UK has achieved in the past,” said the CBI’s head of employment, Matthew Percival.
There are also concerns that productivity, employment and wage growth remains concentrated around the capital and urban centres. “The government needs to focus more on providing a compelling vision for the coming years and tangible outcomes in each region”, Mr Percival added.
UK loses Fifth of Pubs in a Decade
The leisure and hospitality economy has been disproportionately hit by the economic downturn, a new study finds.
Bar work has been a traditional starting role for young adults entering the world of employment. But for how much longer? New government data finds that the number of drinking establishments across Britain has fallen dramatically in the last ten years.
The Economies of Ale report by the ONS has found that Britain has lost more than a fifth of its public houses since the 2008 credit crunch.
The number of pubs that remain open in the UK has dropped from 50,000 a decade ago, to approximately 39,000 today. Although the rate of decline has slowed in recent months, the industry as a whole continues to contract.
Yet despite this, employment within pubs has actually risen.
And it is clear that our thirst for a quick beverage has shown little signs of declining. Revenues within the sector have stayed relatively stable, despite the dwindling numbers of bars and pubs available to the public.
PubCo’s and Bigger Bars support demand for fresh hires
The ONS report provides a map which shows that the downward trend is broadly a nationwide phenomenon. Only in West Somerset, Fylde, and the Scottish Highlands have the numbers of pubs increase during the decade. The economic impact of the downturn on the industry has been most widely felt in areas surrounding metropolitan centres. Areas close to London, including Dagenham and Luton, have seen more than half their pubs closing in the past ten years.
Significantly for recruitment trends, it is the smaller pubs (defined as ten or fewer members of staff) are disappearing most rapidly. Around 12,000 have cal;led final orders for the last time since 2001.
On the other hand, larger bars have seen a boom in fortunes, and highly-staffed, larger establishments now account for a greater share of the entire industry than ever before. With 1,495 “large” bars now in Britain, they have seen their numbers treble this century.
As a result, total employment across England and Wales has risen 17 per cent since 2008.
“Looking at this data, it is clear that pubs are facing challenges, but that they are also crucial providers of jobs around the UK”, said Kate Nicholls, UKHospitality’s chief executive.