Professional hiring flatlines in September

• Permanent vacancies show 0% growth year-on-year
• Contract vacancies within financial services jump 8%
• Engineering vacancies fall by 7%
• Demand for marketing professionals up 15%
• Average salaries fall by 0.8%   

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Professional recruitment firms reported that vacancy numbers flatlined in September with the number of permanent vacancies remaining unchanged year-on-year according to new survey data from the Association of Professional Staffing Companies (APSCo). This is in line with the latest data from the Office for National Statistics (ONS), which reported in October that the overall employment rate stabilised at 74.5% in the three months to August 2016 – representing no change in percentage points when compared to the three months to July 2016.

The latest data from APSCo reveals notable variations between the trade association’s core sector groups in terms of hiring activity. While permanent vacancies across both financial services and marketing, for example, have increased (4% and 15% respectively), IT and engineering have both recorded dips of 7%.

Opportunities within financial services remain strong 

Despite warnings from the British Bankers' Association (BBA) that financial services institutions are poised to relocate to Europe over Brexit, opportunities within the sector remained strong in September. Permanent vacancies across financial services increased by 4% in the year to September while opportunities for contractors increased by 8% over the same period. While finance remains the most buoyant sector for interim roles, the latest figures suggest that demand is beginning to stabilise following a spike post-referendum. In September we reported that contract roles had increased by 16% year-on-year in August.

Engineering vacancies dip

Permanent vacancies within the engineering sector dipped by 7% year-on-year in September. This is despite the fact that UK manufacturing activity grew at the fastest pace in more than two years in September, with the Markit/CIPS manufacturing Purchasing Managers' Index (PMI) rising to 55.4 from 52.1 in August. This hesitancy to bring on board talent is likely to be attributed to sector-wide concern over the impact that leaving the single market will have on not only UK exports but also the availability of talent. This may explain high-profile job cuts across the sector, with Bombardier announcing it will cut another 7,500 jobs worldwide, which has raised fears for its British aerospace and rail workforce, while Fujitsu will cut almost 2,000 UK jobs as it looks to slash costs.

Demand for marketing professionals up

Demand for permanent marketing professionals increased by 15% year-on-year in September while interim vacancies rose by 3% over the same period. This is in line with a recent report from advertising and marketing trade body, the IPA, which found that employment prospects and marketing budgets were both up in the third quarter as companies commit new marketing resources to maintain brand awareness and competitiveness, particularly in overseas markets.

Average salaries up 

APSCo’s figures also reveal that median salaries across all professional sectors increased by 0.8% year-on-year. This figure is characterised by notable fluctuations in terms of sector, with insurance, for example, recording an uplift of 12.4% while in banking average salaries were down 4.4% year on year. Average salaries within the professional sectors fall short of the national increase in pay as reported by the ONS which found that earnings grew at an annual rate of 2.3% in the three months to August 2016.

Ann Swain, Chief Executive of APSCo comments:

“With the huge ambiguity around what Brexit will eventually look like and the associated volatility in the price of sterling, it is hardly surprising that professional hiring is flatlining. However, conversations with our members have confirmed that businesses realise that whether the UK is eventually inside or outside of the single market of goods and services, we must keep the wheels in motion and the spread of vacancies across various professional sectors is indicative of how businesses are preparing for the UK’s eventual exit.”

“With its huge reliance on overseas relationships, it’s no wonder that recruitment activity within manufacturing and engineering has slowed. However, the prognosis for opportunities in this area moving forward remains good, with the recent confirmation of UK-based contracts to build carriages for the Greater Anglia franchise, as well as orders to build new London Overground trains amongst others.”

“While vacancies within financial services have remained strong in recent months as companies draft in experts to prepare for a new legislative landscape, it seems that organisations are now thinking more holistically about their Brexit defence strategies. A surprise post-referendum success story is the marketing sector, which can likely be attributed to the increasingly influential role that marketing plays in driving British output growth. It seems that organisations are realising that investing in marketing talent is crucial to remaining competitive in increasingly uncertain times.”

Adam Pode, Director of Research for Staffing Industry Analysts, which compiles the report for APSCo, comments:

While we have yet to see a discernible BREXIT effect, there may be an increase in temporary vacancies and a converse decrease in permeant hiring as the uncertainty of what is going to happened over the next couple of years becomes more certain.

In the IT space, as we allude to in our report, there is also great concern over Fujitsu’s announcement that it is cutting almost 2,000 UK jobs early next year. According to the company, this is so it can remain competitive with foreign rivals that can offer services more cheaply. What is particularly concerning for the sector is the company is adamant that, “These changes are in no way linked to the decision by the U.K. to leave the EU”.

The former Chancellor, George Osborne, often spoke about the need to "rebalance" the economy away from financial services and towards manufacturing. Despite the fall in the value of sterling, this month’s figures seem to indicate that this is far from happening.”

Source: Apsco.org