With fears that a recession is looming and with inflation expected to hit 18% in 2023, James Reed, chairman of Reed.co.uk, said some of the more extreme characteristics of this jobs boom will likely tail off but he still expects businesses to need to satisfy their ongoing skills needs.
He told HR magazine: “Reed.co.uk’s job vacancy data suggests that, if there is a recession, it is unlikely to be one that will lead to high unemployment.
“The predicted economic downturn is unlikely in the short term to eradicate the skills shortages felt by many industries."
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Data from Ayming UK shows that 63% of businesses are still struggling to grow due to staff turnover and the loss of skilled workers.
As a result, an analysis of more than 750,000 job adverts by Go1 has found that companies are still actively searching for hires with specific capabilities, with soft skills such as confidence, creativity and problem-solving top of the in-demand list.
Coupled with an understanding that a recession will impact consumer spending in specific industries Jon Boys, labour market economist at the CIPD, said that this will result in any recession hiring activity being impacted in a by-need and sector-specific manner.
He told HR magazine: “The rise in energy prices means that people have less money to spend so we could see the hospitality industry affected, and other places that people spend their disposable income.
“People are also less likely to buy durable goods like cars and furniture. However, public services, such as teachers and nurses, could stay in high demand, as the need is always there regardless of economic conditions.”
Jack Kennedy, UK economist at hiring platform Indeed, added that job postings for consumer-impacted industries are already slowing, but companies are still seeking specific skill sets.
He said: “Healthcare roles are typically among the hardest to fill in any economic environment and highly skilled tech roles still remain relatively difficult to recruit for. “
ONS data on the total number of jobs in industry at any given moment also suggests that a recession has a sector-specific impact on employment and hiring.
The post-2008 financial crash recession saw sharp declines in the number of individuals employed in the gambling industry, some manufacturing sectors, construction, warehouse work, and the food and beverage industries as well as the financial sector, the creative industry, and those whose jobs relate to employment and administration.
Johnny Coulter, CEO of recruitment specialists Troi, said these patterns are being born out in current recruitment activity.
He told HR magazine: “Consumer-led businesses have initially been hit hardest and we have seen this through our own client base, with 80% of any client slowdown in the last six months sitting in the B2C sector.
“Additionally, many investors in the tech sector are shifting to profit over growth. Therefore, we are seeing a reduction in the need for sales, marketing, and GTM functions within scale-ups as they focus on getting their products ready for market.”
Andrew Wood, co-founder of video recruitment platform Willo, said that the impact of a recession will also see the characteristics of businesses' approach to skills and hiring change.
He told HR magazine: “Companies continuing to hire will need to source in different talent pools – such as graduate and early careers – to fill succession roles, which would previously have filled with the existing talent pipeline.
“Reducing time-to-hire will become even more relevant as the businesses that continue to hire will be sourcing from a smaller pool.”
