Leading job and careers website, Reed.co.uk, has conducted research revealing a noteworthy 17 percent decrease in job postings during the first half of 2023 compared to the previous year.
Simultaneously, there has been a substantial 29 percent rise in job applications, suggesting a softening of the UK’s labour market and a potential shift in the balance of power between employers and employees.
The decline in job postings reflects the ongoing economic challenges faced by businesses in the first half of 2023. However, amid the uncertain landscape, certain sectors have demonstrated remarkable resilience and growth. The Motoring & Automotive sector experienced a surge of 63 percent in job postings, followed closely by the Energy sector with a 47 percent increase.
In contrast, Reed.co.uk’s data revealed a sharp decline of 41 percent in job postings for the Hospitality and Catering sector, while the Social Care sector experienced a 39 percent drop. These figures highlight the significant challenges these industries face and the pressing need for innovative solutions to support their recovery.
Job applications are on the rise
While the number of new job postings declined, job applications saw a remarkable rise of 29 percent in the first half of 2023 compared to the previous year. The IT & Telecoms sector experienced the highest surge in applications, with a massive increase of 72 percent, while the Education sector also saw a rise of 60 percent.
While some sectors thrived in attracting job applications, others continue to face an uphill battle. The Training sector experienced a notable decline of 34 percent in applications, followed by the FMCG sector with a decrease of 12 percent. These statistics indicate that more can be done to bridge the gap between job seekers and available opportunities in these sectors.
As expected, given the ongoing cost-of-living crisis, average salary offerings across every sector rose in the first half of 2023 compared to the previous year. Sectors that saw the greatest rise include FMCG (20.8%), Charity & Voluntary (14.5%), Manufacturing (10.6%), and Customer Service (10.1%) sectors.
In contrast, roles in the Scientific, Financial Services, and Human Resource sectors experienced the least year-on-year growth in average salary offerings — 2.1 percent, 2.1 percent, and 0.5 percent respectively, falling far below the rate of inflation over the same period.
Commenting on the findings, James Reed, Chairman of Reed.co.uk, stated, “The significant drop in job postings, coupled with the surge in job applications, indicates that a radical shift in the employment landscape is underway — as we move from a ‘sellers’ to a ‘buyers’ market for talent. This likely marks the end of the candidate-led labour market that emerged post-pandemic, as the balance of power tilts back towards employers.”
Reed further noted, “With fewer job opportunities and a rise in job seekers, candidates will likely face increased competition for new roles. As employers regain control over the hiring process, this has the potential to impact everything from salary negotiations to the flexible/remote working arrangements that have become essential for employers looking to attract and retain talent.”
A pending recession?
Regarding the long-term economic uncertainty, the drop in job postings reveals the toll it has taken on businesses this year. Looking ahead, the growing reductions in job postings — a trend that accelerated in the second quarter of the year — could be an indicator of a pending recession.
Reed emphasized, “The data suggests the post-jobs boom deceleration which we saw in the latter half of 2022 is moving beyond a mere ‘cooling off’ period and could turn into an economic downturn.”
Reed urged employers to recognise the importance of hiring and retaining top talent, even amid economic uncertainty. He emphasised the need to invest in securing the right people now, as it will position businesses for success when the economic recovery begins. Reed also called on business leaders to ensure fair wages for their employees by adopting a generous view and increasing wages wherever possible.
What can the government do
Reed also highlighted the critical role of the government in inspiring confidence among employers to continue investing in their businesses. He suggested the development of a more ambitious national workforce strategy to stimulate economic growth across all key industries, following the example of the NHS Long-Term Workforce Plan.
According to Reed’s data, Northern Ireland emerged as the most resilient region, experiencing a 3 percent boost in job postings, potentially indicating increased business confidence in the aftermath of the Windsor Framework. However, all regions in England witnessed a decline in job postings ranging from 15-18%, with London experiencing the largest drop at 18 percent.
Notably, North West England and Yorkshire saw significant boosts in job applications, with an increase of 34 percent and 35 percent respectively, showcasing potential growth avenues for businesses aiming to level up
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.
