In our 2022 vs 2023 recruitment trends report we considered what the hiring landscape may look like in the coming year. Morson Market Analyst, Dr Gareth Owen examines recruitment trends spanning January – April 23 across four key industries; construction, technology, rail, and aerospace, to provide an accurate picture of what’s happening in the industry right now.

Foreword

by Dr Gareth Owen, Morson Market Analyst
Across most sectors, there is an uncertain economic outlook due to geopolitical tensions, Brexit obstacles and the ongoing shadow of the pandemic that has led to rising interest rates, rising costs for businesses & consumers, talent shortages and supply chain challenges.

While a bleak economic outlook, cost of living crisis, and political turmoil have been grabbing the headlines around the world, fundamental changes have continued to take place, shaping the
world of work in new ways, bringing new challenges and, critically, new solutions.

The trends I’ve identified in these reports, drawn from a rich database of Morson candidate data, expert conversations and insight from global sources, highlight key micro and macro socio-economic factors affecting the current state of the workplace and what it means for the labour market of tomorrow.

Many of these trends will persist beyond the near-term fluctuations in the business cycle, the goal of these reports is to support employers as they navigate a turbulent talent landscape.

> Momentum builds in construction

The UK construction industry is building momentum, as the S&P Global/CIPS UK Construction Purchasing Managers’ Index rose for 2 months in a row. The best-performing area was commercial construction whilst residential building work has fallen for the third consecutive month.

The number of UK construction sector job adverts has hit a 14-month high according to the REC Labour Market Tracker. However, there are some obstacles to taking advantage of the growth in demand. The CITB/Build UK report indicates that the construction industry needs an additional 45,000 workers a year to meet growing demand.

There are calls for the government to bring in overseas workers to replace those lost due to the Brexit exodus of foreign workers by adding 5 construction roles to the UK Government Shortage Occupation List.

> A frenzy of talent shortages, skills gaps & lay-offs in tech

Over the last 6 months, many tech companies have announced large-scale redundancies. Caused by over-optimistic and rapid hiring during the pandemic and a later drop in earnings.

A flow of candidates from the major tech layoffs may help to alleviate the tech talent shortage stemming from economic and workforce inactivity.

The government has ended their contract with Tech Nation after a decade of transforming UK tech. Some of their activity will be transferred to Barclays, but the Global Talent Visa programme has not found a new home. This political shortsightedness is casting doubt on the future of those applying in the digital technology field.

> A mixed bag of optimism & dispute on the track

The rail industry is getting back on track, as post-pandemic passenger demand has improved, leading to an increase in orders. However, political challenges are impacting a return to growth, evidenced by delays in the HS2 project to reduce costs. Experts are noting that project delays increase costs in the long term.

The Transport Secretary set out plans in Feb 2023 to reform the railways in the UK. Describing them as ‘not fit for purpose’ and ‘financially unsustainable’. The plans include increasing the role played by the private sector to help restore financial sustainability post Covid.

There is also increased pressure from ongoing industrial disputes in the rail sector. The need to find 120,000 additional people by 2030, is reported by City & Guilds and NSAR.

> A renewed sense of optimism in aerospace & defence

There is a renewed sense of optimism about the aerospace and defence industry after a challenging 3 years caused by Covid 19, Brexit and the war in Ukraine.

Global aircraft orders in 2022 were the highest in 7 years. Deliveries are approaching pre-pandemic levels fed by an upsurge in travel demand.

The chancellor announced an additional £11bn in the Spring Budget for the UK defence budget. This will bring UK military spending to 2.25% of GDP by 2025.

The turning point in industry fortunes is reflected in a positive outlook from major industry players. Airbus reported solid financials and a ramp-up in production, while the Ukraine war fuelled record orders at BAE Systems.

Concluding thoughts

by Dr Gareth Owen, Morson Market Analyst

While there is cause for concern, businesses across all sectors should be hopeful about the future.

The UK economy narrowly avoided a recession in 2022 but this will be of little comfort to people suffering from a continuing cost of living crisis and the country remains at risk of a recession in 2023 according to the OBR and The Treasury, despite a slight improvement noted by the chancellor in his spring budget.

There has been a succession of disappointing news on diversity, most notably a rise in the average gender pay gap over the last 5 years. The UK Government has not offered a beacon of support on gender equality either, rejecting five of the recommendations from the Women and Equalities Committee report on menopause. Progress has also stalled on the representation of people from Black Caribbean backgrounds and women in STEM, according to MP’s, through the Parker Review announced new targets for the ethnic diversity of the management team at FTSE 350 companies.

The UK Labour Market is on shaky ground as employers continue to struggle with filling open vacancies, particularly for permanent roles but there is optimism about growing employee numbers. Candidate attraction issues and the cost of living crisis are feeding through into strong growth in rates of starting pay for both permanent and temporary roles.

Whatever future recruitment trends may hold Morson is here to support you to attract, retain and develop the best talent.

Our solutions are for organisations seeking to enhance their capability, who need flexible, adaptable solutions to help scale, brand-led strategies to inspire, screening solutions to comply, ED&I insight to transform, training to develop or technology to streamline and accelerate.