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After a turbulent phase in 2022, marked by record vacancies, the recruitment market is showing signs of stabilising, resembling pre-pandemic levels. Economic factors, including rising interest rates and inflation, have impacted consumer spending, but government efforts to curb inflation seem to be yielding more positive economic growth.

Following a record year in recruiting for marketeers in 2022, this year has seen a significant fall in activity. Overall we have seen a fall of 41.8% in the first half of this year, compared to last. Hiring activity started to fall a year ago and looking at the 2023 forecast we are expecting a year-on-year decrease of 35.5%.

At first glance the figures do not spell good news for the professional recruitment market with decreases in all but two metrics for month-on-month and year-on-year data. Dive deeper into the data though and there are encouraging signs of growth.

Following an uptick in vacancies at the end of the first half of 2023, monthly vacancy numbers have since dropped significantly in July to below the 12,000 level. This fall could be an indicator of the current economic climate, with companies reducing hiring volumes. It is unlikely that this decline is a result of seasonal dips ahead of the summer holidays, given the uptick noted between June and July 2022 (5%).

Healthcare vacancies in 2023 so far are down on 2022 volumes, with numbers in Q2 2023 also falling compared to Q1 2023. While in normal circumstances a fall in vacancies would suggest that employers are having greater success filling roles, the opposite is likely the case for the sector, given the skills shortages that are prevalent across the NHS.

Year-on-year figures underscore the slowdown in the recruitment market, with permanent vacancies and placements down by -19% and -24% respectively from June 2022 to June 2023.

The sluggish growth of the British economy is becoming evident. London has been hit harder than the rest of the country, with a significant decrease in industry vacancies compared to last year.

HR has gone through profound changes over the last three years, as the sector first grappled with Covid, remote working and associated issues. The subsequent surge in recruitment meant that departments were under pressure once again, in a way not seen before.

The number of IT vacancies in Q2 2023 is not only significantly down on Q1, but has also dropped when compared to 2022 volumes. While there is still demand for specialist IT professionals, particularly in areas such as cybersecurity and digital, the economic slowdown is having a major impact on hiring, with many tech companies forced into making thousands of layoffs.

Following a dip at the start of Q2 2023, vacancy numbers across the education sector have since risen significantly, reaching levels reported during the hiring peaks in Q1. This indicates that there is strong demand for teachers and education professionals as schools and trusts continue to struggle to hit their recruitment targets...

We are still in a tight labour market and recruiters will have to help strike the balance between end hirers who are seeking out high performers on tightened budgets, and candidates who are increasingly becoming self-aware of the power they hold over the recruitment market.

The Welsh economy performed solidly in 2022, with professional vacancies in key sectors and business functions showing significant growth compared to the previous year. The outlook for 2023 is one of cautious optimism.

While some specialist legal areas will inevitably fall victim to the UK’s economic slowdown, others such as litigation, distressed asset sales, restructuring and insolvencies will see an increase in revenues. Recruitment and retention will nonetheless remain a priority as firms vie for top talent.