The current jobs market is tough – it’s taking longer to secure a new job and even getting interviews is more difficult than in recent years.
How did this happen? There’s lots of noise about redundancies and layoffs and globally these have created waves – but is this in part media sensationalism? Looking across the UK as a whole, beyond the tech economy, redundancies since 2021 have been sub-150,000 per quarter which in general is a lot lower than the numbers reported in 2000 to 2014, and it is similar to figures between 2014 to 2020 (with a huge redundancy spike due to the pandemic). Without perspective, uncertainty promotes caution, cultivating a cost-sensitive outlook which impacts B2B revenues with cascading effect.
So, why is the tech jobs market so tough? Most simply, it is due to the number of vacancies being recruited for which has been on a downwards trend in absolute numbers over a consecutive number of years. Reduced vacancy counts increase competition, and encourage a higher bar than is usual for any particular role. Factors driving this are symptomatic of less investment in R&D in the tech and science sectors, with a 6% decrease (as reported by the ONS) in private investment between 2023 and 2021. Which in turn is at least in part due to confidence in ROI.
However, it isn’t all doom and gloom. There’s a correlation in public to private investment of about 1:1 in the short term (rising to 1:3 longer term), and the Autumn Budget 2024 promised a £20 billion injection into public R&D investment within the UK over the coming year. Whilst much of this targets research rather than the commercial sector, and is an incremental rise rather than all new money, it is heading in the right direction. If companies can secure grants and public money for R&D, that should in turn provide the optimism to kick-start the sputtering jobs market, especially if private investors look positively on returns in these sectors. Then those reduced science and engineering teams will need expanding to keep up with projects and demand. We can reasonably hope to see further investment initiatives to promote business confidence in the economy. Whatever the source, it only takes a little confidence to propagate before the rising tide can lift all boats.
Perhaps we are not too far away from a bounce back in tech and science hiring.
