State of the South West job market: Q1

By the end of 2021, the job market was showing signs of recovery after the most turbulent two years it had faced since the recession of 2008. Employment rates were up and, thankfully, unemployment rates were falling.  

However, employers continued to face challenges. Not only were we not completely out of the woods economically, the threat of the ‘Great Resignation’ lingered over the heads of many sectors, especially those such as Hospitality and Tourism.

Research by Personio found that the potential talent exodus that may happen in the next 12 months could cost UK businesses nearly £17bn, with almost 4 in 10 employees looking to move jobs once the economy has strengthened. 

Additionally, because of a rapid increase in demand, employers witnessed record numbers of vacancies but a worrying lack of candidates to fill those roles, albeit the drop in numbers was at its softest in December 2021 compared to only nine months prior.  

With a rather more optimistic year ahead, companies looked to 2022 with hope. But how has the first quarter of this year panned out for jobs in the South West? 

Permanent placements started strong 

In January 2022, according to the REC, the upturn of permanent staff appointments in the South of England was the steepest of all four regions monitored. It was growing at a more rapid rate than average and the hope of recovery for the job market was no longer a distant vision.  

However, this growth did begin to slow into February and March. While still above average, especially in February, the rate of growth was certainly beginning to soften. This change was attributed to the challenge of candidate hiring and retention in a highly competitive job landscape, continued uncertainty from candidates as well as Brexit-related challenges.  

Job vacancies at an all-time high 

In February 2022, the South of England saw its thirteenth successive month of vacancy growth according to the REC. Available jobs in the South West grew by over 10 per cent.  However, this growth in vacancies meant that supply and demand did not match up. According to a report in Business Live, ‘recruiters frequently mentioned that demand for staff outstripped supply, and therefore clients had to increase pay offers to secure staff.’  

Candidate competition drove inflated salaries 

Because of the continuous lack of supply of key talent, employers began 2022 fighting to hire and retain staff. This saw February reach a near-record increase in permanent starting salaries in the South West after having risen for 12 consecutive months.  

In-demand roles remained similar  

The roles where candidates were in short supply but desperately required to fill an increasing number of vacancies continued to remain the same with a few exceptions.

Accounting and Financial, Blue-Collar workers (such as drivers and mechanics), construction workers, IT and Computing, and Nursing and Medical care have remained understaffed since the start of the quarter.

As we headed into February and the Great Resignation began to truly sweep jobs in the South West, Hospitality and Catering also became a prominent feature on the list.  

Unfortunately, economic uncertainty continues to rule the job markets as we head in to Q2 of 2022. With inflation at a record high and climbing, the cost-of-living crisis wreaking havoc on individual and businesses alike and an overarching concern still around the coronavirus pandemic, the next steps for the market are still unknown.

Businesses will still need to ensure they are exercising flexibility and adaptability while also thinking about how they can best prepare for an inevitable squeeze in the coming months.