Rutherford Blog

Jackson Baker
3 months ago by Jackson Baker
Job Market Recovery Uk 2021 Rutherford (2)

​​Bouncing Back: Job Market Recovery in the UK

As lockdown restrictions begin to ease in the UK and the vaccine rollout continues, the reopening of the economy has prompted a positive shift in the labour market, with unemployment rates declining and job vacancies at an all-time high since the start of the pandemic.

The past year has posed unprecedented challenges for many business sectors, particularly the hospitality, leisure and retail industries. Employees within these trades were either put on furlough or made redundant. Comparatively, vacancies in the health sector soared during 2020 with new jobs being created in the midst of the pandemic.

Remarkably, the UK job market is recovering more quickly than anticipated. According to the most recent KPMG and REC UK Report on Jobs survey, job market activity reached an all-time high last month with a considerable rise in vacancies across the economy. Simultaneously, the number of people on the payroll rose by 97,000 between the months of March and April as lockdown restrictions began to be eased. These statistics suggest that as the country begins to return to normality, the British economy is on a path to strong recovery.

Increased Demand for Labour

As economic optimism gradually increases, the demand for labour has sky rocketed. Rising confidence amongst British employers has led to increased hiring, and pressure on recruitment agencies and professionals to provide support to companies looking to hire – a trend that is expected to continue throughout this year. Notably, there has been an increase in permanent placements as opposed to temporary contracts in Q1 2021.

According to the REC, in the three months leading up to April employer’s confidence about making new hires and investing in their businesses increased dramatically by 15 percentage points to net: +28, the highest the index has been since June 2016. Further, in the first week of May the REC’s latest Jobs Recovery Tracker reported 181,000 new job openings, giving a total of 1.53 million active job postings in the UK.

The Competition for Skilled Talent

As job vacancies rise, employers are facing difficulties in sourcing skilled candidates amid a limited talent pool. This has been exacerbated by persistent pandemic uncertainty and the recent EU trade deal, restricting the amount of people seeking new jobs. In turn, those companies seeking to hire have been forced to increase starting pay to ensure they secure the best talent.

On this note, there is mounting pressure on both businesses and recruiters to support and encourage candidates to explore upskilling, in order to fill skill gaps and find work.

Weathering the Pandemic: the Recruitment Market

The pandemic has impacted the recruitment industry considerably. Reports suggest that agencies that focussed on permanent roles struggled more than those that focussed on temporary or contract vacancies over the last year. In 2020, permanent roles were harder to fill due to either delays or businesses prioritising the more pressing consequences of the pandemic.

Additionally, there have been clear differences in the performance of recruitment agencies depending on the sector. For example, the tech industry has demonstrated resilience when compared to recruiting activity in financial and professional services.

For many recruiters, the key has been to maintain strong relationships with their clients and candidates, utilising technology to help sustain and build new ones. Although the market has been unpredictable over the last year, with the economy opening up again, the recruitment industry should expect a fruitful year ahead.

Looking Ahead

The pandemic has significantly shaken up the labour market, but with government intervention, either via loans or furlough schemes, many businesses and employees continue to be protected. However, for some companies, downsizing and redundancies has been the unfortunate reality.

Looking ahead, as the economy begins to bounce back businesses are now competitively and diligently hunting for skilled staff to nurture growth. The job market has been remarkably busy, with many companies relying on recruiters to bring in the best talent to help their businesses thrive. The recruitment industry continues to play a major role in aiding economic recovery, while helping employers adapt to the long-term changes imposed by COVID and bringing more diversity and inclusivity to the labour market.


Jackson Baker is a Manager at Rutherford, the executive specialists in compliance, financial crime, legal and cyber security recruitment.
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