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The latest ONS data showed that vacancies have continued to grow at an exponential rate for 2022 so far, rising to a new record of 1,295,000 between February and April. This consistent uptick has meant that for the first time since records began, there are fewer unemployed people than job vacancies. For the staffing sector, this statistic is a concern as skills shortages remain rife, and we are starting to see greater pressures placed on the contract market as a result.

Holidays Prompt Drop in Recruitment, but Contract Roles Remain Resilient

While the year to date has certainly seen recruitment activity increase, the holiday period in April did have an impact on hiring. According to APSCo’s latest Recruitment Trends Snapshot, there was a general decline in professional vacancies in April, with permanent vacancies down 19% month on month.

The data, provided by the global leader in software for the staffing industry, Bullhorn, did, however, show that in the absence of permanent resources, there has a greater reliance on the temporary workforce with the demand for contract professionals increasing by 2% in the final half of the month, while permanent vacancies fell by 3%. Year on year, contract demand also grew 13% in April. Although this is lower than the 24% annual growth in the contract recruitment market that was reported in March, it does highlight the scale of pressure being placed on this flexible segment of the workforce.

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Legislation Changes Needed to Support the Temporary Workforce

For recruiters, demand for highly skilled contractors is having a positive impact on revenue, with profits from contractor placements up 31% between March and April. With this flexible segment of the workforce set to play a crucial role in filling resourcing needs for some time yet, we expect to see this positive revenue growth continue.

However, as our own Global Public Policy Director, Tania Bowers, has reiterated, this reliance on the flexible workforce could be at risk due to the continued lack of clarity around the Employment Bill:

“The UK’s employment market is not fit for purpose in the current economic landscape, and APSCo has warned that the long-awaited Employment Bill needs to be pushed forward swiftly if the country is to recover from the impact of the pandemic and Brexit. It’s clear that the future of the labor market needs to be flexible, dynamic and fair, but current legislation is not designed to support this.

“The self-employed have a crucial role to play in the skills short environment that we are experiencing, and ensuring these individuals are adequately supported and able to operate in a flexible manner without being penalized is important. We’re already seeing Off Payroll case law impacting this segment of the market, and the UK is at risk of diminishing its own flexible workforce if action isn’t taken. Self-employed status needs to be defined in legislation that differentiates highly skilled self-employed independent professionals from dependent contractors, workers, other variants of self-employment and the lower skilled, less independent elements of the gig economy.”

Necessity of Data in Uncertain Labor Market

As Joe McGuire, sales and strategy director, analytics at Bullhorn, also highlighted in the recruitment trends snapshot, access to the latest trends and data will also be critical in strengthening the recruitment market:

“There are many things affecting the labor market today, not least rising inflation and the talent shortage, and we will see some fluctuation in macro-level industry data. In these unprecedented times, it is essential to have easy access to real-time data, data about your own business. Understanding how the behavior of your clients and candidates is changing and having the agility to react quickly is what will keep agencies most competitive.”

The professional recruitment sector is set to face tough times as the talent shortage continues to impact recruitment success in an economy that is still adapting to the impact of Covid, Brexit and IR35. APSCo will continue to be the voice of the professional recruitment market, lobbying for the legislation and support our members need to thrive in the new hiring landscape.

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