Recent research indicates a complex picture of job vacancies across sectors in the UK. In the recent years the salary increases have offset the effects of inflation, but the inflationary pressure has affected the UK economy and labour market in many ways.
There have been several challenges in recruitment and retention in the long-term care sector, with rising vacancies in establishments experiencing employment decline. Several industries have experienced a shift towards a service-dominated economy, with variations in job quality across occupational category sectors.
Prior to the Covid recession the creative and digital sector was growing rapidly in some areas, such as Greater Manchester, due to interventions by local council plans who saw it as a driver of urban renewal and of good jobs.
The impact of new technologies on job task requirements across sectors has also had an impact, as well as the negative effect of real wages on job vacancy durations, which has prompted labour-market experts to ask where have all the good jobs gone?
Employers across industries and job sectors are grappling with how AI can best be integrated into business strategies to smooth the transition for the workforce and maximise productivity, efficiency, and growth, as well as next steps for innovation to enable the responsible use of AI in the workplace.
The provision of training significantly enhances job quality. However, for the creation of sustainable good jobs for young workers, there is a pressing need for interventions on the demand side. These interventions are crucial to stimulate demand for skilled workers, thus fostering a job market that offers quality jobs for the younger workforce and at the same time tackles youth inactivity.
Collectively the data suggest a dynamic and sector-specific landscape of job vacancies in the UK. Whilst the effect of the Covid-19 recession on income dynamics and job-to-job transitions still reverberates in the labour market, the increasing distance from the pandemic suggests that any lingering impact must be diminishing, and therefore any deterioration of the labour market dynamics must be sought elsewhere.
Job Vacancies Down in IT and Top Hiring Sectors
Using the Adzuna intelligence portal we can explore the shifts in the number of job vacancies across occupational category sectors. Moreover, we explore the job vacancy data by sector across local councils to identify the shifts in local labour markets.
The 20 top sectors with the highest number of job vacancies accounted for about 63% of all job vacancies in the period Apr 2022 – Mar 2023, and for about 66% in the period Apr 2023 – Mar 2024. However, the total number of job vacancies across the 20 top sectors decreased from just above 10.3 million vacancies in period Apr 2022 – Mar 2023 to just above 8.1 million vacancies in the period a year later: a decline of 21%. At the same time, the total number of job vacancies across all sectors declined by 24%, which suggests that all other sectors outside the top 20 sectors listed on Adzuna’s intelligence portal accounted for just 3% of the overall decline.
What is also interesting, beyond the overall decline, is the change in the composition of the ranking, particularly the large drop of IT jobs from 1st to 3rd topmost occupation category sector, where almost 600,000 IT job vacancy postings disappeared from one year to the next.
When we dissect the shift in job vacancies across sectors by local labour market, we find that even though most areas (75% out of 50) experienced a shrinking in their local labour market job vacancies, some areas overcame this trend and experienced an expansion in vacancies.
This likely suggests that some local areas have a more robust and/or resilient labour market composition than others, or that local employers managed to tackle the changes of the current market environment better than others. This could also suggest the success of relevant government interventions in some areas over others due to devolution or other contextual reasons.
Nevertheless, as per the examination of the vacancy data between the two periods, there were many more areas that experienced a decline in the job vacancy postings between than the areas which experienced growth. Moreover, the total job vacancy postings losses are far greater than the gains during the recent years (see chart below).
City of London Facing Changes in Labour Demands
Looking more closely at the data from Adzuna’s intelligence portal we see that the top 10 areas in the UK with the largest decline in job vacancy postings, ranked from highest to lowest, have been the areas of: City of London, Manchester, Maidstone, Birmingham, Braintree, Stroud, Midlothian, Dudley, Guildford, and Buckinghamshire.
The top 10 areas in the UK with the largest growth in job vacancy postings, ranked from highest to lowest, have been the areas of: Westminster, Leeds, Malvern Hills, Tower Hamlets, Swindon, Waltham Forest, South Cambridgeshire, Aberdeen City, Vale of White Horse, Bradford.
It is not clear if there is a common theme that may explain the rise and fall in the job vacancy postings among these areas. It may be the case these outcomes have been shaped by local contexts and practices, with exogenous political economic factors and state strategies which influence the rescaling of territorial governance.
One area that stands in clear contrast to other areas is the City of London, which alone accounted for 28% of the decline amongst the 50 local areas we examined. According to a Bloomberg report, there are fewer finance jobs offered post-pandemic in the City of London where many firms reduced labour demand to control expenditure amidst lack of clarity over the recovery of the global economy.
There is also observed decline in hospitality which can be attributed to remote working trends leading to decreased foot traffic and need for support services. Additionally, in Manchester and Maidstone changes in industry demands, shifts in technology, or consumer behaviour can drive shrinkage.
In Westminster on the other hand, strong emphasis on security services and a growing need for security professionals amidst increased risk of global threats. This is further exacerbated by the rise of technology and the demand for jobs related to tech-driven security solutions.
Moreover, in Leeds, the growth in the jobs vacancies from 2022-23 can be explained by the rise of Fintech and Digital sectors, which is also supported by many STEM graduates in the city enhancing job demand in the high-tech industries.
Overall, it’s essential to consider that while there are fluctuations in the job market, these can vary significantly by sector and are influenced by a complex array of factors including economic policy, technological change, and market dynamics.
Written by Nick Litsardopoulos (Research Economist), IES with support from Meghna Sharma (Research Economist), IES.
IES is an independent, apolitical, international centre of research and consultancy in public employment policy and HR management. It works closely with employers in all sectors, government departments, agencies, professional bodies and associations. IES is a focus of knowledge and practical experience in employment and training policy, the operation of labour markets, and HR planning and development. IES is a not-for-profit organisation.