Hiring slowed in November amidst Omicron variant – but 2021 is still record year for the job market

After a year where vacancies have hit record levels, the number of job adverts have taken a downward turn – where in November vacancy volumes were the lowest seen since May.

“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. The emergence of a new variant has yet again 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.” – Chris Poole, Managing Director of Robert Walters comments

In November, national vacancies dropped -9%, ending a 10-month hiring spree where vacancies steadily increased by +6% each month from early 2021 (an average of 32,377 new professional vacancies per month).

The findings – from professional services recruiter Robert Walters ahead of the launch of their 2022 UK Salary Guide – found the biggest contraction in November to be in The North (-14%) – following the announcement that the HS2 Northern Powerhouse Rail will be downgraded. Contractions were also felt in The South (-10%), London (-9%), and The Midlands (-8%).

A Record Year Across England

Nationally, professional vacancies are +110% up on 2020 and just as importantly +55% up when compared with 2019 pre-pandemic numbers. With that, June 2021 was the record month across the period with almost 3x 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 (Sout 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.

Instead, regional growth has been across the Midlands and The North. 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.

Hiring from ‘The Big 4’ muted

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.

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

Not surprisingly, 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 makes moves outside of London

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%.

However, the bulge bracket firms have broadly kept their recruitment into London in line with regional recruitment. 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.

Unprecedented year for legal sector

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%).

Chris Poole adds: “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.”

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.

Technology

IT continues to be the area which bucks the COVID trend, where despite the slowdown in other areas during lockdown, recruitment continued in this area 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.

Chris Poole comments: “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).

“We can see this in the way hiring has continued to shift to IT, Product and Project Management roles (+83%) – with specialists being recruited at pace to help lead on bringing solutions to market.

“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.”

IT support (+105%), consultants (+92%), cybersecurity (+77%), development (+74%), infrastructure (+54%), and analyst (+43%) roles have all been in high demand when compared to 2019 levels.

Click here to download a copy of The Robert Walters 2022 UK Salary Guide.