The news coming out of the UK jobs market has certainly suggested that spring is already warming up rapidly.
16,000 fewer people are now out of work according to the Office for National Statistics – putting total number of jobless at 1.42 million – a figure not seen since 1975.
But perhaps the most significant news for recruiters to come out of the ONS this week was the fact that wages are finally on the rise, with a 2.8% increase in the year to February 2018.
That means the hunt for talent is getting hotter and businesses are finally accepting that pay packets have to be that bit more competitive to secure the best talent.
Paul Mizen, managing director of the Recruit Venture Group, which helped launch, and continues to support, 43 recruitment agencies said the messages from the ground were also positive.
He said: “All that I’m hearing from the agencies that we support is that they are busier than ever. Some businesses are absolutely desperate to fill positions, and that is of course filtering to agencies, many of whom are now actively seeking new staff of their own to cope with demand.
“That is a nice problem to have and the uptick in wage growth is something many of us in the industry have waited for, for a long time.
“That means employers are getting bolder and aiming to be more competitive with their rivals to secure the skills they need. Similarly, employees themselves are fed up with sitting on wages that are either flatlining or barely keeping up with inflation. Now that wages appear to be growing – and the evidence we have seen certainly bears that out – I would expect the jobs market to continue to get hotter.
“Low interest rates and low inflation have been mirrored in wages, but now I think things are starting to seriously turn. The noises I’m hearing from the agencies we support is that the rest of 2018 could be very positive indeed.”
But there are still many constraints in the labour market and a key one is skills. It is acknowledged that the UK has a large productivity gap with other nations like Germany or France. That has been blamed on the lack of necessary skills to supply the economy with the labour it needs.
That 1.42 million jobless figure would surely be significantly lower if the labour force had the right skills, because many industries simply can’t fill posts.
Mr Mizen said: “Productivity has long been touted as a key problem for the UK economy, but we have to accept the issue is likely to be around for a long while yet.
“What recruiters must do is recognise the issue, particularly given the Brexit transition period from March 2019. Net migration may well fall significantly further if the Government doesn’t put in place plans to allow workers with the right skills access to the UK jobs market. That could mean even more posts unfilled.
“So it will be more important than ever that recruitment agencies are in touch with the demands of their local economy. Robust and smart planning to secure and invest in finding potential new candidates with the right skills will be essential for agencies wanting to grow.
“The Government is taking steps to address those skill shortages with, among other things, apprenticeships and T-levels. It remains to be seen how effective these programmes will be but recruiters should be alive to opportunities, understand what new skills could be in the pipeline and plan for how it might shape future business strategy.”
While statistics in themselves are never the full story, huge demand in various business sectors for labour is forcing wages higher. This should see more employees taking interest in new positions and a livelier jobs market.
Lower unemployment and better wage growth suggests signs of blooming spring in the recruitment sector, and possibly a hot summer.
For recruiters working in a salaried position, but who know their patch, their business sectors and geography, now could be a hugely favourable time to start out on their own and take full advantage.
Recruit Venture Group has launched 43 businesses, has a turnover of £138 million and offers a support network of 40 experts on tap.
By putting up the necessary investment to launch the business, as well as vital back office support, including HR, legal, IT, accountancy and marketing, the Recruit Venture Group has successfully helped start businesses in far less favourable economic circumstances than were revealed this week.
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