Hiring is slowing in the UK, but demand for remote work remains high

A turbulent few years for the global economy has prompted huge shifts in the labour market and expectations around work.

After the economy ground to a halt in March 2020, and Covid measures remained in place for much of 2021, this year saw consumer demand rise and job vacancies reach record highs , despite new challenges from inflation. Yet, as we approach the end of the year, LinkedIn data shows the picture starting to shift – but expectations around what people want from work have evolved too.

The story of hiring for the majority of 2022 was one of high volumes of vacancies and labour shortages, particularly in sectors such as hospitality and healthcare, where a recent report estimated a shortfall of almost 50,000 nurses in the NHS. The reasons for such cross-industry shortages were multiple, with a rapid rise in post-pandemic demand contributing in part, as we saw in aviation's summer staffing struggles . A sustained increase in economic inactivity also played a key role, with younger and older workers opting to continue education or exit the labour market early .

From labour shortage to hiring slowdown

But as we approach the end of the year, there are indications of a slowing jobs market. Though the labour market was relatively hot at the start of 2022 – with job transitions in May still 12.3% higher than the same period in 2021 – the data shows a significant slowdown in people switching roles by July. Hiring also slowed from the summer: the LinkedIn hiring rate – the number of members who added a new job to their profile, divided by total membership – was down 13.9% in June 2022 compared to 2021. Notably, 2021 was an atypical year, due to high levels of hiring as the economy reopened, which provided a stark year-on-year contrast with 2020, when hiring dropped off during shutdowns.

In November, hiring slowed further still, with the LinkedIn hiring rate down more than a quarter on 2021 levels (-25.7%). Even hiring in previously hot markets dropped: in the accommodation sector, which includes hospitality, it was down 23.7% compared to November 2021, while hospitals and healthcare saw hiring drop 24.0% in the same period. Sectors where hiring fell even further were retail (down 30.6% year-on-year) and technology, information and media (down 32.1%) – an industry that has seen a number of firms, including Meta and Amazon, make significant layoffs in recent weeks.

Demand for remote work outstrips supply

It's not only hiring that has seen significant shifts in the past year – data also shows the type of jobs people are looking for is changing too. The pandemic prompted a rapid shift to remote working, and though many have returned to the office, ONS data suggests more than one in five workers now have a hybrid work setup – and many people are seeking such roles.

LinkedIn data shows that, in November, 21.1% of all job applications were for roles that offered remote work, almost double the share in January 2021 (11.6%). Yet by November, only 11.1% of jobs advertised on LinkedIn offered remote work as an option – down from 15.6% of roles in January 2022, and even lower than the proportion of remote roles in January 2021 (12.2%). The figures suggest many more people want remote work than can find it, and research by Timewise, a part-time work consultancy, has come to a similar conclusion: it suggests there are four people chasing every part-time job , based on a combination of ONS data and the firm's own survey of UK job ads.

Workers globally want flexibility

According to LinkedIn data, the UK is not a particular outlier in this trend. In the US, the demand for roles that offer remote work has soared – more than half of applications in November (52.3%) were for remote roles, while the supply of such roles stood at just 14.3% of all paid job ads on LinkedIn. In several European markets, there is a similar disconnect between demand and supply of remote roles: in Germany, almost a quarter of job applications are for remote roles, which make up less than 10% of all roles advertised on LinkedIn.

Emma Stewart MBE , co-founder of Timewise, emphasises the economic significance of the lack of available flexible roles – keeping people out of the workforce who would like part-time work, and leaving other part-timers "trapped" because they don't want to give up their conditions without roles to move to. These workers "represent a deep, hidden pool of talent," Stewart says. "However, trying to attract them without including part-time options within the wording of your job ad is like going fishing without a net."

Is flexibility a 'no brainer'?

Many advocates of increased flexibility also highlight the inclusion benefits, particularly for people with disabilities or caring responsibilities. Diversity advocate Natasha Chetiyawardana believes hybrid working is increasingly going to be seen as a positive for employers and employees : "Working flexibly increases productivity … It’s a welcome liberation for many (especially working parents) from the shackles of presenteeism and it will encourage talented people back into the workplace. What we know is that force doesn’t work."

Attitudes are evolving on a larger scale: the government recently announced plans to give workers the right to request flexibility from day one in a role, and shortened the time in which employers must respond to such requests. The debate on how such policies will work in practice has seen many flexibility advocates celebrate the move, while some have highlighted the challenges that lie ahead in managing such requests.

Flexibility ultimately boils down to trust, suggests Henry Stewart ?? , chief happiness officer of Happy, which took part in the recent four-day working week trial in the UK. While it hasn't been without challenges, they plan to continue.

"As long as your team is getting as much done as [they] were before, why would you not want to do it?" says Stewart."[The team] has better wellbeing, and they're getting as much done, so it's a no brainer, really, isn't it?"

Methodology

• The LinkedIn hiring rate is the number of hires (LinkedIn members in each industry who added a new employer to their profile in the same month the new job began), divided by the total number of LinkedIn members in the UK.
• The job transition rate is calculated using the start date of a member's new job at a different company after a previous job has ended. A three-month rolling sum of job transitions is calculated to remove short-term noise. This is divided by LinkedIn membership.
• Remote roles and applications data refers to job ads where the poster labelled it as "remote" and those with keywords such as "work from home". The proportion of remote roles is calculated in relation to all paid job postings that were open for at least one day in a given month.

Reported by: Siobhan Morrin

Economic Graph team: Rosie Hood, PhD , Cllr Shane Moynihan (Séin ó Muineacháin) , Caroline Liongosari

Managing Editor: Emily Spaven

Special Projects Lead: Michele Pierri