Interview With Dan Martin – Broadbean Technology MD
The good news is that the number of job vacancies posted by recruitment agencies in the UK is rising, marking a turnaround in the job market. We caught up with Dan at this year’s Recruitment Expo in Birmingham to go over the data and get his open on why this trend is taking place.
The bad news is that wages aren’t keeping pace. That’s the conclusion of Dan Martin the Managing Director of Broadbean. And since Broadbean process over 2 million job adverts and 9 million job applications from 60,000 recruiters each month, they’re access to job data is almost unrivalled and they should be listened to.
Dan, how would you sum up the job market this year?
At the start of the year there were reasons for cautious optimism, yet there was always a worry that that optimism may not actually translate and the jobs could fall away. But now it’s October we can be confident that growth is real and that’s backed up by our data.
Isn’t it often the case these stats hide the fact most if this growth is London-Centric, or boosted by one industry, skewing the average figures for the rest?
Not at all, we’ve seen huge growth in vacancies across the board, not just related to one sector (interestingly the one sector suffering is oil and gas). This growth in vacancies is not London/South East centric but seen throughout the country. In fact the best performing area is the East Midlands with job growth (vacancy posting) of 26.6% and an increase of 21.1% in terms of applicants. The growth in vacancies is real.
This would usually mean a growth in salaries as well?
Yes it would, but job growth hasn’t transpired into growth of salaries – there has actually been a decline in salaries for the first time in 5 years. On average salaries are down 1.2% from last year and more sectors are showing wage decline than growth. This on the whole risks the entire fundamental growth of the economy.
Why do you think we are seeing falling wages?
It could be down to a whole range of factors. The stats mentioned relate to advertised salaries so the first thing to say is we don’t distinguish between different role types. For example companies may have been holding off hiring at the junior level, deciding to hold onto their senior-level hires. Now, these junior roles are starting to come through as businesses are a bit more confident, these roles have a lower salary and skew the average. But I also think that companies are still incredibly cautious when it comes to pay. As we all know government and public sector workers are having to accept pretty low-level pay increases and in many cases no increases at all and the private sector have been having that for some time. So I think it’s probably a mix of different role types, different job types in terms of people moving towards more part-time roles that skew the numbers down to a certain extent.
But as jobs are increasing you would expect wages to as well. This is unusual isn’t it?
One thing that we absolutely know is that we are not seeing the wage increases that you would expect to see with the increased demand for labour. Normally as demand starts to outstrip supply you see salaries increase and we are definitely not seeing that at the moment. This is the first time I have ever seen this trend occur. During the recession it was the opposite, there was a large supply of skills/labour but few jobs and salaries were down, expectedly. You would absolutely expect that trend to change as the job market reverses but right now we’re not seeing it.
Could it be lack of skills…that candidates aren’t as highly skilled as they used to be?
That could certainly be a factor. At the more junior end of the scale you’ve had high youth unemployment for quite some time and maybe people of that generation haven’t been getting the skills you would maybe expect for someone 2 or 3 years out of Uni. The other thing that is changing though is the Generation Y change in attitude. People are determined to move around more, try new things, they’re less satisfied to settle for anything and I think maybe that will have some impact on depressing salaries. As people move around a bit more they don’t build up a level of experience in a particular sector and therefore don’t command as high a salary.