Hiring demand increases as unemployment rates fall

Companies are hiring more frequently than ever, at a time when job vacancies are exceeding the rate of unemployment.

The BBC reported that the UK's unemployment rate fell to a near 50 year low (3.7%) between January and March 2022, while the number of job vacancies rose to 1.3 million. Inflation rates have also reached 9%, the highest figure for 40 years.

This coincides at a time where the UK finds itself in the midst of an unprecedented cost of living crisis.

Research from employment agency Manpower Group calculated the national employee outlook, done by subtracting those employers who plan to reduce staffing levels from those who plan to hire staff.

A positive number suggested that there were more employers looking to hire people than there were employers who intended to decrease staffing levels.

Manpower's study found the national employment outlook to be +35% for the third quarter of 2022, up 22 percentage points from the same period last year. 

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Chris Gray, UK director at ManpowerGroup, suggested the cost of living crisis  is motivating workers to seek higher salaries.

Speaking to HR magazine, he said: "The current economic climate is putting a strain on both employers and candidates.

"As a result we have seen an increase in job hopping, as candidates look for salaries that will sustain them during these unprecedented times of inflation."

The banking, finance, insurance, and property industries particularly showed strong hiring intentions for the next three months, returning an employment outlook of +49%. 

IT and technology companies also had an employment outlook of +49%, while manufacturers had hiring intent of +38% for the upcoming quarter. Gray said the findings show that companies are still recovering from the effects of the pandemic.

He said: “Many employers are still playing catch up from the pandemic, with roles to fill as they return to full service. For example, we are seeing an increase in requirements for airport staff, university staff, and within the manufacturing sector in general. This is a hangover from the pandemic as the country continues its recovery.

"We are also entering into the summer season and seeing the typical seasonal hiring for that. It will be interesting to see what the Q4 outlook brings, given we will be approaching the holiday season and therefore more seasonal hiring, yet the threat of economic downturn also looms.”

Jill Cotton, career trends expert at recruiter Glassdoor, added that the pandemic's effects are creating challenges for recruiters.

"The resulting impact is companies are finding it hard to attract and retain talent," she told HR magazine. Recruiters are having to double down as there are no easy fixes.

"Increasing salaries or adding welcome bonuses may initially seem attractive, but Glassdoor research has shown that it is a company's culture and values, the strength of leadership and access to career opportunities that keep a workforce satisfied."

Graham Trevor, HR director at recruitment firm Randstad UK, said that businesses are making a particular effort to train their own staff to fill skills gaps.

Speaking to HR magazine, he said: "Employers are not simply recruiting furiously to counter the shortfall in candidates. They're also increasingly willing to retrain their own staff to fill gaps elsewhere in the business. 

"HR teams know talent is scarce and that vacancies are hard to fill - they are trying to reposition employees where possible, retaining their organisation's competitive edge. Be warned - with labour this scares, wages will rise further."

Manpower Group surveyed 2,030 UK employers about their staffing intentions between July - September 2022.