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In recent months, we have reported how the professional job market has bounced back since the dark days of the first lockdown – and I’m delighted, though not altogether surprised, to see this recovery is ramping up. Official figures show that unemployment has continued to fall across the UK, with the Office for National Statistics finding the number of workers on payrolls has jumped by 356,000 in June. This represents the biggest monthly increase since equivalent records began in 2014. Looking at professional recruitment specifically, for the fourth consecutive month, we are seeing big increases in both month-on-month and year-on-year vacancy and placement figures.

Contract roles up 90% year-on-year

APSCo’s latest data, provided by growth analytics experts cube19, reveals a 10% month-on-month uptick in permanent vacancies with contract roles up 14%. Year-on-year, the figures show an even more impressive spike, with rises of 72% and 90% respectively.

Unsurprisingly, the data also reveals that sales revenue for the recruitment sector showed substantial month-on-month growth, up 12% across both permanent and contract placements, and huge spikes year-on-year – up 77% and 102% respectively.

It is apparent that the recruitment sector has a major part to play in the UK’s market recovery as we move towards the “next normal” — and this is proved by some of the financial results we are seeing from our larger members. Page Group, for example, has recently reported increased gross profit per fee earner in Q2 this year compared with the same periods in both 2019 (up 2%) and 2020 (up 94%). Meanwhile, Robert Walters’ latest trading update saw a 31% increase in gross profit compared to the same period in 2020.

Other metrics, such as the fastest headline wage growth since records began in 2000 and the fact that redundancies are at their lowest level in six years, further highlight the strength of today’s job market. Businesses are clearly putting hiring firmly back on the agenda.

This strength across the recruitment market is in line with other reports from organizations such as the CIPD, which, in its latest Labour Market Outlook report, pointed to not only employer optimism in terms of hiring intentions, but also major skills shortages — suggesting that niche professional recruitment firms will be more important than ever during the recovery.

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Skill shortages

As recent consequences of the so called “pingdemic” have highlighted, a dearth of talent can have a direct and severe impact on the availability of products and services, as well as the wider economy and market recovery. Aside from these short-term skills gaps created by a surge in people self-isolating, our members are reporting ongoing acute talent shortages across various sectors, which have been exacerbated by a sharp increase in demand spurred by lockdown easing and increasing market confidence.

Add to this mix the fact that up to 1.3 million overseas nationals left the UK last year — with almost 700,000 non-UK born workers vacating London alone — and it is easy to see why businesses are struggling to source the skills they need to thrive. Just last month, some of the UK’s biggest tech companies urged the government to take action to address a shortage in digital skills which could hold back the post-pandemic recovery. Elsewhere, Lloyds Banking Group Plc found in its latest cross-sector survey of 1,200 businesses that almost a fifth report difficulties getting staff with the right skills.

As Joe McGuire, Chief Revenue Officer at cube19, highlighted in our latest report, “Agencies, like their clients, are finding it challenging to hire and onboard talent quick enough to keep up with demand. This is leading to a rapid upward trend of leaders looking to harness the true value of their own data to improve the efficiency of their recruiters.”

Essentially, in the space of a year it seems the UK has swung from facing an unemployment crisis to a recruitment crisis. Against this backdrop, the value of professional recruitment consultancies has never been more evident. At a time when skills shortages risk hampering post-pandemic recovery, recruitment consultancies must step up to the plate and play their part in helping businesses to contend with talent gaps. As the financial results of our members demonstrate, there are huge opportunities for firms who can identify and secure scarce skills.

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