The UK job market is facing a challenging period, with job vacancies continuing to decline and unemployment on the rise. Understanding the current state of the job market throughout 2024 is key for both employers and job seekers, so let’s dive in!
What’s Going On in the UK Job Market Right Now?
The estimated number of job vacancies from February to April 2024 was 898,000, a decrease of 26,000 (2.8%) from November 2023 to January 2024. This marks the 22nd consecutive period of declining vacancies, with decreases seen in 13 of the 18 industry sectors.
Compared to the previous year, the estimated vacancies from February to April 2024 were down by 188,000 (17.3%), although they remained 102,000 (12.8%) above their pre-coronavirus levels from January to March 2020.
From January to March 2024, the number of unemployed people per vacancy rose to 1.6, up from 1.4 in the previous quarter (October to December 2023) due to rising unemployment.
What Does the UK Exiting the Recession Mean for the Job Market?
It’s not all doom and gloom after recent news declaring the UK is officially out of recession, with figures showing the economy grew by 0.6% between January and March, the fastest rate for two years. But what does this mean for the job market?
According to the latest KPMG & REC UK Report on Jobs, there are signs that the job market is stabilising, but many businesses are hesitant to increase hiring efforts too quickly due to economic uncertainties.
Is the Decline in Permanent Placements Slowing?
Data shows that permanent placements have fallen each month since October 2022; however, the rate of decline in April 2024 was noticeably slower compared to previous months, easing to its weakest since June 2023.
This slower rate of decline suggests the job market is starting to stabilise and could indicate a potential improvement in hiring trends moving forward.
Changes in Employment Law
There were numerous changes to employment law, which took place in April 2024. Arguably, the most noteworthy changes are the National Living Wage/National Minimum Wage increases:
- NLW rose from £10.42 to £11.44 and was adjusted to include those from age 21.
- NMW increased to £8.60 for workers aged 18-20, £6.40 for workers under age 18, and £6.40/hour for apprentices.
This increase will help support lower-paid workers with the cost of living and hopefully encourage more people to move into work. However, small businesses may struggle with these increased costs, causing them to fall back on unsustainable measures such as risky loans.
Do We See a More Positive Immediate Future for the Rest of 2024?
The future of the UK job market throughout the rest of 2024 appears optimistic, with the following key points suggesting some stabilisation:
- Placements have fallen at a weaker pace
- Pay rates have increased to attract candidates
- Candidate availability growth has hit its five-month high
