Despite the typical surge in hiring demand witnessed in January following the customary year-end slowdown, this year saw an almost negligible increase of 0.2%. This growth is markedly lower than the 11.3% surge seen in 2020 and the 3.4% rise in 2023, marking the weakest January increase in six years and bringing job postings to their lowest point since May 2021, during the economic recovery from Covid lockdowns. The slowdown in hiring demand spans the majority of sectors as the post-pandemic hiring boom recedes.

The cautious stance of employers at the start of the year reflects the anticipated economic challenges in 2024. Notably, the UK's situation contrasts with that in major European and North American economies, where job postings remain well above pre-pandemic levels.

Jobseeker activity has resumed its typical post-holiday pattern, aligning with trends seen in recent years. However, hiring challenges persist across some sectors, with notable declines in jobseeker interest compared to pre-pandemic levels. Interest has decreased significantly in social science (down 33%), community and social service (down 31%), cleaning and sanitation (down 30%), and childcare (down 27%) roles, highlighting a skills shortage that has prompted a new government childcare recruitment campaign.

Conversely, certain fields have seen a significant uptick in jobseeker interest: software development roles have witnessed a 252% increase in clicks since February 2020, followed by information design and development (up 168%), mathematics (up 153%), legal (up 77%), and marketing (up 62%), indicating a surplus of interest relative to available positions.

Despite the emphasis on returning to the office in 2023, the proportion of job postings on Indeed offering remote or hybrid work options has remained stable. By the end of December, 15.8% of UK job postings mentioned remote or hybrid work opportunities, closely matching the May 2023 peak of 16.3%. The share of searches for remote or hybrid roles reached 2.7% at year-end, nearing its highest level of 3.0% and increasing tenfold from before the pandemic.

In contrast, London's job market is performing significantly worse than its pre-pandemic state, with job postings 19% lower than in February 2020, compared to a 5% decrease for the UK overall. The enduring preference for hybrid working and the downturn in many professional services sectors are contributing to the reduced hiring demand in the capital.

Jack Kennedy, Senior Economist at Indeed UK said: “The UK labour market hasn’t received its usual January injection of job postings, signalling a softening in hiring demand following the post-pandemic boom. The question in 2024 is whether the job market stabilises or retreats further. The Bank of England is hoping the continued fall in vacancies will mean wage growth easing from its current elevated levels, paving the way for interest rate cuts later this year. But with unemployment still low and continuing challenges around workforce participation, it remains a somewhat tight labour market. From an employers’ perspective, hiring challenges have eased but haven’t completely disappeared, with many industries needing to fill roles but not always receiving sufficient jobseeker interest. Remaining competitive on pay, benefits and flexibility continues to be important to attracting and retaining talent.”