As the end of the furlough scheme edges ever closer, the number of job postings has continued to climb month on month, according to the latest Keep Britain Working Job Index.
Figures from the job site Reed.co.uk show that the monthly increase in jobs posted, which started in May, has been replicated over the summer months and is now at its strongest level since March.
Overall, the majority of the 36 sectors covered by Index are reported to be back to or above 50% of where they were in January. This is a move in the right direction, albeit from a low base, and hopefully signals that a slow and cautious recovery is underway in the jobs market. It also reflects the current sluggish return to previous levels of business activity, as organisations come to terms with new and more restrictive operating environments.
James Reed, the co-founder of Keep Britain Working and chairman of REED, said:
“As seen in the last couple of months, Britain’s job market is slowly beginning to emerge from the shadow of the unprecedented challenges presented by the lockdown. However, recovery is slow and the looming furlough deadline and the potential for a tidal wave of job losses in October is rapidly approaching. Our data together with GDP and ONS figures demonstrate that the much hoped for V-shaped recovery is likely to be far more nuanced for the economy in general, and the job market prospects of sectors will continue to show winners and losers to various degrees.
“As I have previously mentioned, there is a major concern for the young and the low paid in this economic recovery. The rising average salaries we are seeing for jobs advertised are falsely inflated because of the removal of lower-paid jobs, not higher salaries being paid. As companies embark on price wars to win back customers there is real concern that wages could face a downward pressure. If we are to have a level, sustainable economy that works for everyone then jobs must be created in all sections of society and the tax burden must be evenly shared. Until that happens we will not be on the true road to recovery.”
Sectors on the up
Construction and estate agency sectors are leading the way in terms of a job market response with both showing strong gains in the last month compared to other sectors. Previously mothballed construction sites have recommenced with stronger levels of activity returning and estate agents are benefitting from increased consumer demand linked to the Stamp Duty holiday announced by the Government.
Construction showed an increase of 11 percentage points since July, while estate agencies saw even larger growth with a rise of 17 percentage points. Both have rebounded well from the lows of March and April. Hopefully, with the Stamp Duty holiday extended to the end of March 2021, this momentum, built on the back of improved consumer demand to move home, will continue to fuel a jobs fightback.
Likewise, the hospitality sector, which experienced a drastic and sudden downturn in activity following lockdown, has shown signs of a positive trajectory over the past three months with August’s jump fuelled by the Eat Out to Help Out scheme funded by the Chancellor. It will be interesting to gauge the follow-on effect once the scheme ends and if consumers tempted to venture out to pubs and restaurants will continue to do so once the financial incentive is removed.
Other sectors showing stable or slight jobs growth over the past month include accountancy, banking, engineering, IT telecoms, legal, automotive, and purchasing.
Rhys Harris, associate director – engineering, process & construction at fellow Keep Britain Working member, Morson Group:
“Clear gains in the construction and property market is also mirrored in our own data at Morson, with contractor numbers doubling within our construction & civil infrastructure markets since April. Growing demand for blue, and white, collar workers, from bricklayers through to site managers and quantity surveyors, provides a major boost to the UK economy. The PM’s promise to ‘Build, Build Build’ and put jobs and infrastructure at the centre of the country’s growth is a sensible step to get the economy moving again. The construction industry contributed up to 10 per cent of GDP in pre-COVID figures and its swathes of major players and their supply chains – many of whom are SMEs and family businesses – provide a vital contribution to our recovery.
“At its peak, the pandemic was fast-moving and largely unpredictable, with many employers now recognising the importance of having a strategic outlook on the procurement of talent in a bid to regain control of their workforce, provide access to key worker information and deliver cost efficiencies – particularly those with large contractor populations. Without a managed service provider (MSP) to deploy the correct corporate governance and compliance processes, an organisation lacks key management information and the ability to efficiently flex and scale their talent acquisition function; with the looming IR35 private sector reforms and Brexit only adding more fuel to the fire in what is the ‘perfect storm’.
“Employers need to reassess how they build pipelines which reach, recruit and retain the best workers, whilst developing and deploying a strong employer value proposition (EVP) that defines who they are and delivers exceptional candidate journeys. There are unprecedented numbers of active candidates in the construction market – levels that we may never see again in our lifetime – which provides a unique opportunity for organisations to cut through the noise, lock in the best talent and put themselves ahead of their competitors.”
And those struggling
On the flip side, the well-documented volatility and jobs churn in the retail sector continues to dominate the headlines. After a couple of months of growth, progress has stalled, and the retail jobs index shows a return to the level last seen in May. With retail businesses having to deal with implementing COVID-safe shopping environments and current low levels of consumer confidence, the sector will be pinning its hopes on Christmas as the next big opportunity to kickstart a return.
Consumer research indicates that traditional occasions such as Bonfire Night and Halloween will not be celebrated to the same degree this year and that they are focussing on the festive period instead. The retail sector certainly hopes so.
Salaries holding their own despite pressure
The August index also shows a shift in pay. A trend of increasing average pay through June and July has continued into August. The average salary advertised is now 12 percentage points higher than in January. The index finds that this is not because of an increase in salary, but the removal of lower-paid jobs from the market. There is concern that there could be downward pressure on wages as a consequence of price wars to get consumer attention, as we have seen with food outlets continuing to offer discounts after the Eat Out to Help Out government scheme has ended and major grocery chains embarking on widespread price cuts.
Social care, logistics, scientific, hospitality and banking were among those sectors offering higher average salaries over the past month. This also demonstrates that businesses are still looking for managerial and strategic roles to steer the ship through troubled waters. We are also seeing the remit of these roles expanding as companies ask for senior experience at a lower level.
Market demand remains a big concern for businesses
In an exclusive survey conducted by Keep Britain Working, businesses picked out ‘demand in the market’ as their number one challenge going forward. Even for companies that have seen business levels improve during the pandemic, the prospect of maintaining market demand was the biggest concern as they assessed the future. In a sign that many are battening down the hatches intent on seeing the current crisis pass, only 21% of companies questioned said they have ‘investigated new customers or markets’ in recent months, and just over one in ten organisations said they intend to seek help for their marketing and sales planning.
Morson is leading the northern presence of Keep Britain Working to help match up businesses with essential workers and find new roles for those who have found themselves out of work. Search our latest jobs now.