Amount of time it takes to hire workers drops to seven year low of just over a month
The amount of time it is taking businesses to hire staff has slimmed to its lowest level in seven years in a sign friction in the jobs market is beginning to unwind, new research out today shows.
Employers left roles advertised on job boards on average for 37 days over the last year, down from 44 days in the year before, according to job search engine Adzuna, which monitored over 80m UK ads as part of the research.
Vacancy lead times tend to be monitored by investors, economists and central bankers for indications of labour market tightness, which refers to whether demand for workers is being met by supply.
Over the last year, a reduction in the size of the workforce driven by an increase in the student population and a rise in long-term sickness has hamstrung companies’ hiring efforts.
Demand for staff has also remained extremely high despite the UK’s economic slowdown and the Bank of England twelve successive interest rate hikes to a near 15 year high of 4.5 per cent. According to the Office for National Statistics (ONS), there are 1.2 unemployed people per vacancy, historically extremely low.
Unemployment nudged up to 3.9 per cent over the last quarter, although that was mainly driven by a record net outflow of 241,000 from economic inactivity during the period. Those who aren’t in a job or looking for one aren’t counted in the ONS’s jobless figures.
Strong appetite for staff colliding with weaker labour supply has raised incentives for companies to lift pay to attract workers. Private sector pay growth has been accelerating rapidly over the last year.
Bank economists have identified cooling wage growth as crucial to convincing them to pause raising interest rates at their next meeting on 22 June. Markets think borrowing costs will rise at least one more time this year.
A reduction in the economically inactive population should ease tension in hiring processes by making more candidates available to businesses.
Andrew Hunter, cofounder of job search engine Adzuna, said: “The jobs market may have swung back in employers’ favour, but many businesses are still struggling to fill talent gaps.”
The company found that it is taking just over 108 days to source automotive technicians and 101 days to hire a nurse, the top two roles with highest vacancy lead times. Hiring an IT consultant takes 100 days, Adzuna said.
Obstacles in finding suitable staff has been “driven by skills shortages and ongoing workers’ strikes, the hardest-filling roles demand specialist skills and lie within the automotive, healthcare and sales sectors,” Hunter added.