LinkedIn Workforce Report | United Kingdom | April 2018

Over 24 million people in the UK have LinkedIn profiles. We anonymise and aggregate the information from these profiles to create unique insights into workforce trends.

The LinkedIn Workforce Report is a monthly report looking at hiring and professional migration trends in the UK, and this month’s report looks at the latest data from March 2018. This is our sixth Workforce Report for the UK, and it also takes a comparative look at both data from March 2018 as well as that from the previous 12 months to benchmark our findings and identify trends.

LinkedIn’s vision is to create economic opportunity for every worker in the global workforce. We hope that the Workforce Report will be useful to our members, allowing you to better navigate your career, and to businesses and policy makers, who will be able use our insights to better inform their decisions on talent, migration, and employment.

Key Insights

Last month we identified that the UK had become a net loser of international talent for the first time since the report began. This month we’ve performed a deeper analysis of migration trends since the referendum in which the UK voted to leave the European Union. We have also included relevant insights from a survey of more than 600 recruiters and HR professionals in order to understand the experiences of talent professionals working in this changing environment.

• The UK is now losing talent to the 27 other EU member states (EU27). Changes to migration flows take time, and we are only now able to see the trends since the Brexit referendum. The UK saw a net outflow of professionals to the EU27 in the first quarter of 2018 (Q1), as fewer EU27 professionals move to Britain and more professionals in the UK relocate to the EU27.

• Fewer professionals from the rest of the world are moving to the UK. Over the last year professional migration from the rest of the world to the UK has gone down by 20%. The UK is still importing talent, but at a lower rate.  Nearly a third (28%) of recruiters think the UK has become less attractive to candidates from the rest of the world – it appears that the perception that Britain is a place to advance your career has faltered.

• London’s access to talent is declining as the capital is now losing talent to other countries. Since the referendum, the net inflow of EU talent into London has reversed and now more people in London are relocating in the EU27 than vice versa. Domestic migration into London is unchanged, and not filling the gap left by the departure of international talent. Recruiters in the capital say Brexit is having the biggest impact on hiring ability, with 54% saying it is having a ‘big’ or ‘huge’ impact – higher than any other region of the UK.

• Healthcare is the sector most affected by Brexit, according to recruiters. Recruitment and HR professionals are also seeing the biggest impact of declining international talent on the Manufacturing, Construction, Finance and Education sectors.

• Migration from Ireland to the UK has declined more than any other member state of the EU. The share of Irish professionals moving to the UK has fallen by 37% over the last year – more than any other European country.

• Hiring nationally is down across the UK. The seasonally adjusted (S.A.) Hiring Rate across the UK was down Month on Month (MoM) in March, falling 1.2% since February and maintaining a downward trend since January. Year on Year (YoY), the hiring rate was 6% higher in March 2018 versus March last year.

• Hiring was down in 6 of the UK’s 12 nations and regions in March. The S.A. hiring rate fell MoM for the second month in a row in London (–2%). Heavy snowfall in the North East (-5% MoM), North West (-5% MoM) and Wales (-10% MoM) may have had an impact on hiring activity in these regions.

• The public sector led the way with the largest increases in hiring in March. There were MoM increases in the hiring rate in Education (5%) and Public administration (4%). Healthcare, however, is struggling to recover from a large fall in February. MoM falls in hiring in Energy and Mining (down 10%), Corporate Services (down 7%) and Entertainment (down 7%) also indicated that the private sector is less buoyant.

Migration

International Migration to the UK

As a whole, migration into the UK has been falling steadily since the referendum on the UK’s membership of the EU, and is down 22% over the last year. In Q1 2018 the UK became a net exporter of talent.

EU Migration into the UK

Migration into the UK from the EU27 countries has been falling steadily since the referendum on the UK’s membership of the EU, and is down 26% in the last year. Inflows peaked in Q3 2016 at 36 members per 10,000 arriving, but have since fallen to 25 members per 10,000. In Q1 2018 more professionals left for the EU27 in the first quarter of this year than entered the UK from the EU27. The UK became a nation that loses talent to the EU, rather than gains from it.

The fall in professional migration from Europe can be seen across all EU27 nations, including the EU15 countries (the 15 member states before the accession of new members in 2004). The source country that was associated with the biggest declines in flow to the UK as a share of the total EU27-UK flows was Ireland (–37% YoY to end Q1 2018).

Outflows of professional talent to the the EU27  also rose after the Brexit referendum, increasing 14% in the year to end June 2017.

Migration into the UK from the rest of the world

The changes that we have seen in migration since the referendum are not limited to movements from or to EU27 nations: there has also been a reduction in migration to the UK from the rest of the world of 20% over the last year. Outflows to non-EU nations are also down (-17% in the last year). The UK is still importing talent from the rest of the world, but at a lower rate than previously the case.

EU migration into London

London became a net exporter of talent to the EU27 in Q1 2018. Migration to the capital from Europe has been falling steadily since the Brexit referendum and is down 22% over the last year.

EU27 migration to London peaked in the third quarter of 2016 at 94 members per 10,000, but has since fallen to 65 members per 10,000. At the same time, outflows to the EU began to increase immediately after the referendum.

Migration into London from the rest of the world

London has also appears to have become less attractive to talent from the rest of world, but remains (marginally) a net importer of talent as of Q1 2018.

The regional migration picture

When looking at net migration of both UK and international talent, only three regions recorded a net gain of workers in March: London, the North West and the South West. While this is similar to the pattern of recent months, in London net overall migration has picked up in March, while it has slowed in the North West and the South West. Wales showed no net migration at all, and the rate at which the eight other nations and regions lost workers to other parts of the UK and overseas is uneven.

Outward migration from the UK’s regions

London, the East Midlands, and the South East continue to be the regions from which members are most likely to leave and move to other UK regions or abroad.

Of these three regions, only London saw a majority of people who were leaving heading overseas. Similarly, the majority of those leaving Scotland and Northern Ireland also head abroad.

Inward migration to the UK’s regions

London, the East Midlands, and the South East have continued to be the regions gaining the most members from other UK regions or other countries.

London and Scotland both saw the majority of inbound members arrive from another country, but figures from March confirm that the number of international arrivals in Northern Ireland are going down, and the majority of its arrivals now come from within the UK.

Net flows to UK regions

London, the South West and the North West continue to be net recipients of combined domestic and international migration, and although London is gaining more migrants, fewer have been heading for the South West and North West since January. The North East continues to see the largest net outflow of domestic and international talent of any region.

Domestic migration continued to flow principally into London, gaining 25.9 members per 10,000, although the data indicates that domestic migration into London is not making up for the fall in international migration. The regions seeing the largest outflows of people leaving are the South East (23.8 leaving per 10,000), North East (23.0 leaving per 10,000) and East Midlands (21.5 leaving per 10,000).

From the perspective of international migration, only four out of the 12 nations and regions were net gainers of international talent in March compared to five in February and nine in January. In March, London, the East Midlands, the North East, the North West, Northern Ireland, Scotland, Wales and Yorkshire and the Humber all lost more workers to other countries than they gained.

The Hiring Rate

The S.A. MoM National Hiring Rate in March was down 1.2% on the previous month, maintaining its downward trend since January.

Year on Year (YoY), hiring was up 6.1% on March 2017, indicating that more people took up new jobs in March 2018 than March 2017. Hiring is showing a the expected monthly pattern, with a large fall in January followed by a slow recovery that should continue rising until August, when holidays typically reduce hiring activity.

Regional Hiring Rates

The S.A. change in the Hiring Rate was negative MoM in six of the UK’s 12 nations and regions in March. The hiring rate fell for the second consecutive month in London (–2%) and has been sluggish in the capital for the past four months. Hiring also declined in the East of England, the South East, the North West, the North East and Wales, and was unchanged in Scotland and the South West. The seasonally adjusted MoM hiring rate grew in only three regions: the West Midlands (3%), Yorkshire and the Humber (2%) and the East Midlands (1%).

Although there is a better picture when it comes to YoY growth, with only three regions displaying a fall in hiring compared to March 2017, the rate in London was again negative (down 2%).

Notable regional activity this month includes:

London

The S.A. Hiring Rate in London MoM fell by 2% in March – marking the fifth month where there has been no significant increase or decrease in hiring in the capital. Although a YoY decline on March 2017 was not the greatest in the country, and follows the hiring pattern of last year, it is greater than was seen in February. With other sources confirming high vacancy rates this lack of activity may be due to a skills gaps or an absence of candidates, rather than an absence of job opportunities. Finance continues to be the strongest hiring sector in London, followed by Software & IT Services, and Corporate Services.

South East – Hiring in the South East is also showing signs of a tightening labour market, with the the S.A. MoM Hiring Rate in March down 3% reversing growth of 1% in February. The region’s YoY Hiring Rate has also slipped, up just 1% on March 2017. Hiring activity in the South East was strongest in Software & IT, Corporate Services and Finance.

Wales – Hiring in Wales has slipped significantly since February, with the S.A. MoM Hiring Rate in March falling by 9%, the largest decline of any nation or region in the UK. This is despite healthy growth in February of 12%, and suggests considerable volatility in the local labour market. YoY the Hiring Rate was also down by 4% versus March 2017. With very poor weather in Wales in March, it is possible that this disrupted business activity sufficiently to impact the hiring rate. The sectors in which there was most hiring were Corporate Services, Manufacturing and Finance.

The North East – The North East is among those regions where there are signs that declining hiring rates are having the greatest impact. As in Wales, and the North West, the poor weather in March may have also been a key factor.  The S.A. MoM Hiring Rate fell by 6% in March, and the YoY Hiring Rate was also down by 4% on March 2017. Energy, Mining and Manufacturing continue to dominate hiring patterns in the North East.

The North West – The North West also registered a poor performance in March, with the S.A. MoM Hiring Rate down by 5%, although it has retained growth YoY on March 2017, albeit at a modest 2%. As in Wales and the North East, the poor weather may have been a factor. The strongest sectors for hiring were Corporate Services, Software & IT Services and Manufacturing.

Yorkshire and the Humber – The S.A. MoM Hiring Rate in Yorkshire and the Humber grew 2% in March, reversing a significant fall (10%) in February. The region achieved YoY growth in the Hiring Rate of 5% versus March 2017. The sectors hiring most new staff were Corporate Services, Manufacturing and Software & IT Services.

The West Midlands – The West Midlands also performed better in March with an above- national average rise in its S.A. MoM Hiring Rate (3%). The Hiring Rate was also 8% higher YoY on March 2017. Hiring was most active in the Manufacturing, Corporate Services and Software & IT Services sectors.

The East Midlands – The East Midlands also recorded growth in the S.A. MoM Hiring Rate in March of a modest 1%, and the YoY Hiring Rate was also up (5%) on March 2017. The Corporate Services, Manufacturing and Construction sectors registered the most hiring.

Scotland – There was again no growth in the S.A. MoM Hiring Rate in Scotland in March, and growth in Scotland’s YoY Hiring Rate of 7% versus March 2017 was the same as that achieved in February this year. YoY growth continues to be low compared with the end of last year, when it had seen the highest YoY rate of any region or nation in the UK. Most hiring took place in Finance, Energy & Mining and Corporate Services.

South West – There was no growth in the S.A. MoM Hiring Rate in the South West in March, after this region had recorded the highest growth of any region in February, albeit at a modest 2%. The hiring rate was up 3% YoY on March 2017. Hiring was strongest in Manufacturing, Corporate Services and Software & IT Services.

The East of England – The S.A. MoM Hiring Rate fell 2% in March, and the YoY Hiring Rate grew by 4% on March 2017. Most hiring occurred in Corporate Services, Manufacturing and Finance.

Sector Hiring Rates

A deep dive into the individual Hiring Rates for different sectors of the economy can give us a better understanding of the hiring changes that have been taking place.

Energy and Mining – The Energy and Mining sector’s hiring rate continues to be volatile, with the S.A. MoM Hiring Rate falling 10% in March, the largest decline of any sector, after having registered growth of 14% in February. Growth in the YoY Hiring Rate in Energy and Mining of just 2% versus March 2017 was also below the national average (7.5%) among sectors that returned significant data.

Corporate Services – Despite figuring prominently as one of the most significant hiring sectors in many of the country’s regions, the Corporate Services sector registered a decline in its S.A. MoM Hiring Rate in March of 7%. The YoY Hiring Rate rose 4% on March 2017 compared with 16% in February.

Software and IT Services – The S.A. MoM Hiring Rate in the Software and IT Services sector fell by 5% in March following growth of 7% in February. YoY growth in the Hiring Rate was also modest, rising just 3% on March 2017.

Hardware and Networking – Hiring in Hardware and Networking saw a fall in the S.A. MoM Hiring Rate of 3%. The YoY Hiring Rate on March 2017 grew, albeit modestly (4%).

Manufacturing – The S.A. MoM rate dipped by 3% in March continuing the decline registered in the previous month. While there was growth of 4% YoY on March 2017, this is below the 7.5% national average.

Construction – Construction saw a fall in the S.A. MoM Hiring Rate in March (down 2%) continuing the 1% decline in February. However, the YoY Hiring Rate in March 2017 was more positive, at above average 13% growth.

Media and Communications – The Media and Comms sector saw a 2% fall in the S.A. MoM Hiring Rate in March continuing the weak performance of previous months. The 1% YoY growth versus March 2017 is another sign that the sector is not experiencing growth in hiring.

Education – Hiring in Education registered a 5% growth in the S.A. MoM Hiring Rate in March, which reversed a 6% fall in February and placed it at the top of the table among all the sectors that returned significant data. The YoY increase in Hiring Rate was 4% up on March 2017.

Public Administration – Public Administration saw the S.A. MoM Hiring Rate rise 4% in March, reversing a 6% fall in February. The YoY Hiring Rate also continues to pick up, with growth of 15% on March 2017, which is twice the national average.

Entertainment – The Entertainment sector has fallen back, after a pick up in February, with a 7% decline in the S.A. MoM Hiring Rate in March. YoY the increase in the Hiring Rate on March 2017 is just 1%.

Healthcare – Healthcare saw a continuing fall in the S.A. MoM Hiring Rate in March of 1%. Notably, recruitment and HR professionals say they are seeing the biggest impact of declining international talent on this sector. YoY the Hiring Rate in Healthcare was up 5% on March 2017.

Finance – Despite its prominent role among the top hiring sectors in several regions of the country, S.A. hiring in Finance remains sluggish overall, rising MoM by just 1% in March, reversing a 3% fall in February. This sector remained above the national average in terms of YoY growth (9%) on March 2017.

Legal – Hiring in the Legal sector maintained its slow recovery in March, with a MoM Hiring Rate edging up by 2% after 5% growth in February and 2% growth in January. YoY the Hiring Rate was up 11% on March 2017, above the national average.

Transportation and Logistics – The S.A. MoM Hiring Rate in the Transportation and Logistics sector grew by 4% in March, second to Education across all the sectors that returned significant data. YoY the Hiring Rate was up 19% on March 2017, maintaining the strong performance the previous month (18%) and showing signs of longer-term improvement.

Recreation and Travel – The S.A. MoM Hiring Rate in the Recreation and Travel sector was up 4% in March, and YoY the Hiring Rate was up 10% on March 2017.

Real Estate – Hiring in the Real Estate sector continues to be volatile, with a fall of 1% in the S.A. MoM Hiring Rate in March, but it is still outperforming all the other sectors YoY with growth of 20% on March 2017.

Consumer Goods – Hiring in the Consumer Goods sector was up 4% MoM in March, reversing a 4% fall in February. YoY growth on March 2017 of 9% was above the national average.

Retail – Hiring in the Retail sector continues to stand still, with no change in the S.A. MoM Hiring Rate in March repeating its performance of February. YoY growth is better, however, increasing an above average 9% on March 2017.

Nonprofit – The S.A. MoM Hiring Rate in the Nonprofit sector grew 3% in March, reversing the 5% fall of February. YoY the Hiring Rate in this sector grew 6% versus March 2017.

Design – The Design sector achieved modest 1% growth in the S.A. MoM Hiring Rate in March, but remains sluggish with growth of just 1% YoY on March 2017.

Discuss the report on LinkedIn and Twitter at #UKWFR. Follow @LinkedInUK on Twitter to receive future reports, and follow our UK Country Manager Josh Graff on LinkedIn for additional insights.