Given the precarious UK economic situation, it is not altogether surprising that Q1 cumulative job vacancy and application numbers are down in 2023 by 9.2% and 7% respectively compared to the same three months in 2022. Interestingly, the application per vacancy (APV) rate of 25 for Q1 2023 is the highest we’ve seen during the past 15 months. Of particular concern for employers is the fact that applications, which peaked at over 4 million in January 2023, have since fallen back considerably, with March’s figure the lowest of the period (with the exception of December 2022).
If we analyze 2023 figures, we find that job vacancies, although having decreased month on month by 13.9% in February, actually picked up again in March, rising by 10.6% to just under 140,000. So, while this could be viewed as a positive and potentially a sign that the economy is starting to pick up, it is too early to tell whether this upward trend will continue given the many variables at play. Taking a year-on-year view, the latest number for March is down 12.4% compared to 12 months ago. January and February were also down by 5.2% and 10% respectively year on year.
As mentioned, the Q1 cumulative APV rate is up slightly from 24.4 to 25, which is positive news for firms that are hiring. However, the most worrying statistic is the dramatic fall in job applications in March 2023 — they had actually risen by 16.5% month on month at the same point in 2022, hitting almost 4 million. This will be an indicator to follow during Q2 2023, with employers hoping that the APV rate of 19 for March 2023 — the lowest of all the past 15 months — improves so that they have a bigger talent pool to choose from and are therefore better able to hire the talent they need.
Although cumulatively overall job numbers and applications are down in Q1 2023 compared to Q1 2022, interestingly applications are actually higher than in the previous three quarters. The biggest difference has been the fall in the number of jobs, which is to be expected given the pressures that the UK economy is under, with the latest ONS figures revealing that the CPI has risen by 10.1% in the 12 months to March 2023 (slightly lower than February’s 10.4% figure). The latest GDP figures for Q4 2022 revealed that the UK economy hardly grew at all (0.1%), albeit avoiding a technical recession.
Talent Attraction and Retention the Key Priority
If we look at individual sectors, application numbers have fallen sharply in March 2023 for those industries hit by crippling strike action: transport and rail (down 45.4%), medical and nursing (37.8%), and education and training (19.8%). Year-on-year comparisons for March 2023 versus March 2022 reveal that applications for these sectors are down by 29.8%, 16.9% and 11.1% respectively. But the month-on-month decreases in March have hit across the board, with marked drops also noted for FMCG (36.8%), engineering (25.6%), banking (23.9%) and IT (17.9%).
However, while job vacancies fell for medical and nursing by 17% in March 2023, we saw an uptick for transport and rail (6%), with education and training up noticeably by 26%. Other sectors also registered significant increases in job vacancies, including oil & gas and call center & customer services (both 20.7%) as well as logistics, with manufacturing & production and distribution & supply chain both up by 8.9% and 6.3% respectively. This is a clear reminder of the ongoing skill shortages issues facing the UK economy as organizations struggle to source the skills they require.
So, what can we expect for the rest of 2023? Applications will continue to cause employers headaches, especially those sectors affected by ongoing industrial action if revised pay deals aren’t agreed. Skill shortages are driving demand for talent, so hiring should continue to remain steadfast. However, employers will need to review their employee value propositions (EVPs) and offer higher salaries and improved benefits if they want to attract and retain their top talent. And while inflation and the cost-of-living crunch are likely to ease, lackluster growth could hamper the UK’s economic recovery.