Accountancy job seekers and employees across the UK are increasingly confident, despite the UK facing a technical recession and an ongoing cost-of-living crisis, new research shows.
Jobs confidence suggests a mismatch between an economy in a technical recession and a very tight labour market, according to the latest Robert Half Jobs Confidence Index (JCI) – an economic confidence tracker produced in partnership with the Centre for Economics and Business Research.
While the UK fell into a shallow recession in the final months of 2023, the majority (56.1%) of employees remained confident in their job security for the next six months, the research found.
Such optimism hasn’t been recorded by Robert Half since 2009. It comes at a time when unemployment stands at 3.8%, a historically low rate, underlining how tight the UK labour market remains.
The continued skills shortages and job vacancies, still above pre-pandemic levels, are fuelling such job security.
The Robert Half research findings coincide with the most recent official figures showing that more than a fifth of adults in the UK are deemed not to be actively looking for work. The UK’s economic inactivity rate was 21.8% between November and January, marginally higher than a year earlier.
Millions not seeking work
This means 9.2 million people aged between 16 and 64 in the UK are neither in work nor looking for a job, more than 700,000 higher than before the pandemic.
All of this is feeding into pay growth remaining stubbornly high in early 2024, according to the EY ITEM Club. This month’s labour market showed that headline average weekly earnings growth slowed only modestly in January, falling to 5.6% from 5.8% in December.
Private sector regular pay growth, the Bank of England’s favoured measure, eased very slightly to 6.1% in the three months to January from 6.2% in the final quarter of 2024, according to the Office for National Statistics. Its Labour Force Survey continues to suggest that higher inactivity is keeping the jobs market tight.
Transactional accountancy roles are among those that continue to be sought after, despite worries that AI and other technologies will take over these jobs. Payroll recruitment is another area that appears buoyant.
Transactional finance and payroll
Chris Goulding, Managing Director of specialist HR recruitment firm Wade Macdonald, says: “How you view the state of the accountancy jobs market is very much determined by which role you are looking at. Opportunities in transactional finance remain widely available. Payroll is an area where we have seen inflated wage increases.”
He says his firm’s research suggests “a significant skills shortage in payroll, which is causing large gaps to open up in the job market and hence an increase in salaries as businesses fight over talent”.
Fewer people studying for finance qualifications due to the pandemic has resulted in more competition in the part qualified and newly qualified market, he says.
Helen Jones, Head of ICAEW Jobs, says: “On ICAEW Jobs the Audit and Assurance roles are always in high demand and specialised roles related to sustainability reporting and environmental accounting are proving particularly challenging to fill. The scarcity of talent in audit, green finance and sustainability is driving competitive salary trends.”
As data becomes increasingly vital to organisations, employers are looking to hire more accountants with data analysis skills. Candidates, meanwhile, remain focused not just on salaries, but also flexible working options.
Matt Weston, Senior Managing Director UK & Ireland at Robert Half, says: “Tackling economic inactivity requires a multi-layered approach – from supporting those unable to work due to long-term sickness, through to making work pay to encourage more people to rejoin the labour market.”
Weston warned that as welcome as any economic revival is, “business leaders will find the widespread skills shortages and economic inactivity taking much longer to tackle”, with the result that wages will be pushed ever higher.