Professional hiring stable post-Brexit

The UK is experiencing a skills shortage due to a decrease in EU nationals seeking employment

Professional recruitment firms reported that vacancy numbers remained stable in the month following the EU Referendum, with 0.2% year-on-year growth in July 2016 according to new survey data from the Association of Professional Staffing Companies (APSCo). This is in line with the latest data from the Office for National Statistics (ONS), which reported in August that the overall employment rate was 74.5% in the three months to June 2016 – with 23.22 million people working full-time, 374,000 more than a year earlier.

The latest data from APSCo reveals notable variations between the trade association’s core sector groups in terms of hiring activity. While permanent vacancies across both financial services and marketing, for example, have increased (6% and 16% respectively), IT and engineering have both recorded dips (7% and 9% respectively).

Contract vacancies within financial services jump 21% 
Following a steady increase in demand pre-Brexit, temporary and contract vacancies dipped across the professional staffing market in July, with opportunities softening by 2% year-on-year. The clear exception is the finance and accounting sector, where vacancies increased by 21% in July. Most likely due to a reluctance to bring on board talent on a permanent basis until there is greater clarity around what Britain’s relationship with Europe will look like post Article 50 – and how this will impact the operations of multi-national financial institutions moving forwards.

Average salaries dip 
APSCo’s figures also reveal that median salaries across all professional sectors dipped by 0.8% year-on-year. This figure is characterised by notable fluctuations in terms of sector, with financial services, for example, recording an uplift of 3.6%. Average salaries within the professional sectors fall short of the national increase in pay as reported by the ONS, which found that average earnings grew at an annual rate of 2.3% in the three months to June 2016.

Ann Swain, Chief Executive of APSCo comments: “Pre-Brexit, it was widely hypothesised that market confidence and the UK economy would spin into freefall if Britain was to leave the European Union. However, so far these fears have proved unfounded. Data shows that both retail sales and the labour market performed strongly in July, and August’s Purchasing Managers’ Index (PMI) reported that Eurozone activity was at its highest for seven months.

“It is interesting that demand for contractors within financial services remains strong despite widespread volatility in the sector. Lloyds Banking Group, for example, said in July it would axe 3000 jobs and close 200 branches to cushion against a more testing economic environment caused by Britain’s vote to quit the EU. Similarly, European banks including HSBC and Deutsche Bank have also gone on record to say they may have to move people or activities to France and Germany if rules around passporting rights change post Article 50. It seems that an increasingly flexible workforce is being utilised to keep the wheels in motion until there is greater certainty around what the UK’s future relationship with the EU will look like. Until then, the professional recruitment sector will continue to provide talent to firms’ immediate and short-term needs.”