Vacancy Surge Ends, Warning of Peaking Jobs Market: Robert Walters

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A surge in new job vacancies looks to be coming to an end according to one of the UK's leading job sites.

Robert Walters said national vacancies dropped 9% in November, ending a 10-month hiring spree where vacancies steadily increased by 6% each month from early 2021.

They saw an average of 32,377 new professional vacancies per month over the period.

The rise in vacancies tallies with official ONS data that shows the UK economy has around 1.2M vacancies that must be filled, signalling a tight labour market.

But if the Robert Walters figures offer an early signal then the upcoming official data could show growth in vacancies has reached its limit.

The Bank of England's Monetary Policy Committee has frequently referenced the healthy vacancy figures as a sign the UK will avoid a rise in unemployment once the government's support scheme ended in September.

"It is not surprising to hear that hiring slowed somewhat in November – where following the reopening of many sectors post lockdown, businesses made immediate staffing assessments based on people leaving or not returning, which in-turn led to a short-term spike in hiring that was always going to be temporary," says Chris Poole, Managing Director of Robert Walters.

Poole says the emergence of the Omicron variant has left members of parliament sitting on either side of the lockdown argument – creating a lingering air of uncertainty across businesses, particularly within the retail, leisure and hospitality space.

“Nonetheless, the UK is better placed to handle COVID over winter than other European countries – in part due to an early lift of lockdown measures, backed by the vaccine and booster programme roll-out. This means that while in other countries we may well see a complete recruitment freeze take place in certain areas, this is unlikely to happen in the UK,” says Poole.

Nationally, Robert Walters says professional vacancies are 110% up on 2020 and 55% up when compared with 2019 pre-pandemic numbers.

June 2021 was the record month across the period with almost three times the number of vacancies compared to June 2020 (+263%), and over 60% more jobs when compared to June 2019.

Across all professional areas, London has consistently maintained approximately 41-42% of the national vacancies.

Outside of London, the South is the largest region (South East, South West, and East of England) but national share of professional vacancies has slipped from 28% in 2019 to 26% so far this year.

Midlands share of professional vacancies is up from 9.9% to 10.4% and in The North from 15.2% to 16.5% - making it the fastest growing part of the country.

Vacancies within the accounting sector have reverted to 2019 levels, however the increase this year has been primarily from outside the ‘Big 4’ accounting firms.

In 2019 approximately 77% of all accountancy vacancies come from the Big 4, whereas in 2021 (year to date) this has dropped to 69%.

Robert Walters said the key hotspot role within the sector has been tax, with vacancies +30% up on 2019 – as the Government continue to discuss changing taxes to help plug rising costs around COVID and social care.

Financial Services roles continue to be at record levels – with vacancies up by 76% on average since 2020, and by 30% when compared with 2019 levels.

During the past year there has been a move of recruitment away from London to regions such as Manchester, Leeds and Birmingham.

In 2019 46% of vacancies in the sector were in the capital, and in 2021 this has fallen to 39%.

So-called Bulge Bracket firms have had 29% increase in vacancies in London in 2021 year to date (compared with 2019).

Results show a notable decline in the number of executive management roles advertised this year (-20%), instead replaced by a rise in short-term consultants (+395%)

Across financial services firms, risk & compliance roles continue to surge (+40%). In contrast within Bulge Bracket, the growth has been in IT & Tech roles – increasing by +63% when compared with 2020, and 71% when compared with 2019 vacancies.

Roles for Liability Management (-44%), Corporate Treasury (-39%), Private Equity (-30%), and Commercial Banking (-4%) are yet to meet pre-pandemic levels.

The legal sector has also had a record year – where hiring has already surpassed pre-pandemic 2019 levels by +23%, with one month left on the year.

Within London; lawyers specialising in the following areas have been in particular demand - Banking & Finance lawyers (+84%), Company/Commercial (+72%), Family (+66%), Corporate/M&A (+48%), Real Estate (+31%), Energy (+27%), Regulatory (+19%), Restructuring/Insolvency (+12%) and Tax (+11%).

“Going into next year, our forecast is that activity in the legal sector will continue to mirror what is happening across financial services and real estate. The busier those two industries are, the more the law firms will recruit,” says Poole.

London continued to account for a quarter of all legal vacancies – consistent for three years. In part this is due to Magic Circle recruitment in London outpacing other firms – where Magic Circle vacancies up from 7% in 2019 to 11% now of all legal vacancies.

IT recruitment continued through the worst of the pandemic unabated with roles growing on average by +100% since 2020 and +62% when compared with 2019 levels.

October was a record month for vacancies across technology, media and telecoms companies - and September, October and November 2021 were all in the top three months in terms of total vacancies over the last three years.

“The ongoing growth in the technology sector can be attributed in part to the increasing amount of investment from VC and Angel firms – with 2021 already shaping up to be a record year for investment into start-ups (now the fastest growing part of the sector)," says Poole.

“The technology sector, in particular, we expect to outperform 2021 next year as there are no signs that funding is going to dry up. Fintech has become a major area which the UK leads on, similarly new areas are emerging, such as AI and green technology - which the UK is making smart moves to lead on," he adds.