Insights

As 2024 draws to a close, we’re reflecting on the significant shifts experienced by the UK recruitment market throughout the year. Driven by a range of factors – including changes in the national economy, recruitment activity, skills gaps, and the increasing use of AI technology – the recruitment landscape is changing and shows no signs of stopping.

Here are some key insights to provide a picture of the current state of recruitment in the UK – as we head into 2025:

Economic Context & Recruitment Activity

In the first half of 2024, the UK economy showed optimistic signs of progress with Gross Domestic Product (GDP) growth of +0.7% (Q1) and +0.5% (Q2). With economic growth a key priority for the new Labour government, it remains to be seen how this will develop in 2025.

As many as 89% of businesses were actively recruiting in Q3 2024, up by 9% from the same period in 2023 and an increase from 85% in Q2 2024. However, only 28% of employers increased their hiring in Q3, continuing a steady decline from Q2 (31%) and Q1 (37%). This suggests a cautious approach to recruitment, despite overall economic growth.

The average time to fill a vacancy in Q3 was 4.8 weeks, with larger businesses taking even longer to hire. Most recently in the latter part of the year, while there has been a notable reduction in vacancies nationwide, finding candidates with the right skills remains the top challenge for recruiters – with 64% citing this as a major issue.

Skill Gaps & Demand

Indeed the public sector faces significant challenges in recruiting and retaining skilled professionals. According to a survey conducted earlier in the year, over 40% of team roles were reported vacant in 2022, with many still unfilled to this day. Without candidates equipped with the necessary skillsets, there is a significant ongoing impact on the performance of teams and businesses as a whole.

A wide range of placemaking skills are identified as being in high demand, with Landscape Architecture, Infrastructure & Utilities and Property Development & Capital Delivery being areas of short supply.

AI & Technology in Recruitment

Continued and increased uptake in the use of AI technologies is transforming the recruitment process. Recruiters are readily able to utilise AI-powered tools for CV screening, helping identify the best and most appropriate candidates for specific roles, as well as using algorithms to forecast their likelihood of success.

While AI technology in general has not been without controversy, the majority of recruiters in 2024 are positive about its application in the recruitment process and the expectation is that it’s role will only expand in 2025 and beyond.

Flexibility & Work Models

Almost half a decade post-pandemic, hybrid and remote working is effectively the new norm – and with this altered work model, the approach to recruitment has also had to adapt. Flexibility in working patterns and the ability to work from afar significantly expands the talent pool, meaning candidates from much further afield can be considered for roles. This is of particular benefit in identifying people with skillsets that may be lacking in the more local catchment.

Furthermore, employers that offer flexible work models have proven to have a significantly greater degree of employee retention and job satisfaction.

Diversity, Equity & Inclusion (DEI)

DEI remains a top priority in recruitment strategies, with organisations recognising the importance of building diverse and inclusive workforces. This is bolstered by the widening talent pool gained from remote/hybrid work models.

Ingraining DEI into core business principles into recruitment empowers businesses to foster innovation through diverse perspectives and expertise. By prioritising fairness and inclusivity, businesses can create a more equitable work environment, manned by a stronger and more dynamic workforce.

Generational Challenges

By 2025, Gen Z will account for 25% of the global workforce – necessitating change in recruitment processes for this new generation. Studies show that Gen Z candidates are 36% more likely to prioritise roles with opportunities for advancement and 34% more likely to favour those with skill development potential than baby boomers.

Gen Z candidates are also more likely to be conscious of business reputation – both in terms of employee satisfaction and authenticity of CSR initiatives.

Application Trends

Q3 2024 saw a significant increase in job applications, with a 22% rise in overall applications and the average number per role increasing to 24, compared to 19 in the previous quarter. Conversely, the number of jobs posted saw a 10.6% decline when compared to the 2023 average. Some industries were more active than others however – with Education accounting for 21% of jobs posted, and Manufacturing receiving the highest percentage of applications (18%).

The notable surge in applications, in tandem with the decrease in available roles, is indicative of a highly competitive job market for candidates.

The UK recruitment market is ever-evolving. Flexible work models have opened the door for wider-reaching and specialised candidate selection, and the advent of new technologies holds a wealth of capability for streamlined, efficient and effective recruitment processes. Yet the unmet demand for specific skills and a cautious approach to recruitment, as businesses focus on quality hires, are notable challenges for the year ahead – one marked by the occupational needs and expectations of a new generation.