The majority of businesses across the UK (84%) recruited in Q1 2024, increasing from 78% in Q4 and Q1 2023, according to Totaljobs’ Hiring Trends Index.

Of those who hired, almost 2 in 5 (37%) increased their hiring while 18% paused it. This confirms that recruitment activity quickly jumped up following the recession, as January rolled in.

At the same time, businesses hired more temporary staff, freelancers, or contractors (27%) in the past three months than in Q4 (16%) as they evaluated the economic landscape.

Meanwhile, more businesses (26% vs 21% in Q4) restructured a department, team, or wider business.

The high number of vacancies and low rate of unemployment continue to show a mismatch between jobs and workers. In fact, HR decision makers cite finding talent with the right skills (28%), finding the right talent generally (21%), and meeting candidate salary expectations (18%) as their top three hiring challenges.

Meeting candidate salary expectations was higher on the list of challenges for businesses in Q4 2023, but businesses are now more concerned about skills as inflation eases.

Industries that were most likely to have increased recruitment in the first quarter of 2024 were: IT & telecoms (50%); medical and health services (45%): finance and accounting (41%): and hospitality & leisure (40%) as labour and skills shortages in these industries continue to impact businesses.

Businesses that recruited in Q1 2024 were most likely to recruit for technology/IT (35%), operations (33%) customer service (32%) and HR (28%) roles, with the demand for HR professionals increasing compared to past quarters.

The Index also showed that employers have been struggling to find talent with the right skills for some time. Consequently, the majority (59%) plan to train and upskill their employees to plug skills gaps in their organisations. Considering that 21% of workers left due to seeking a career change, employers can invest in employees who are looking for a new challenge and boost their internal mobility efforts to retain talent.

Another one fifth (20%) left for a higher salary, and although rising salary expectations is a top hiring challenge for recruiters, concerns around this has eased compared to last year. Instead, HR decision makers report finding talent with the right skills (28%) and finding the right candidates generally as their top challenges.

Other reasons workers left their employer in Q1 include retirement (19%), relocation (19%) and physical or mental health issues (14%).

As a result of the economic landscape, almost a third of businesses (29%) reported no resignations, indicating that workers are still tentative about switching jobs.

Looking ahead, 74% of employers feel confident about finding the people they need in Q2 as the UK economy recovers.

“We’ve seen the hiring confidence rise consistently over the last year, and as we start 2024 with a new panel of respondents to provide a better view of each industry and business size, the confidence levels increased further,” the Index stated. “Our most recent findings show that the hiring confidence is 84% for large businesses, however they lower to 51% for small businesses.”

More than a third of businesses (27%) plan to increase recruitment in Q2 (consistent with Q4 2023), with construction (36%), IT & telecoms (36%), transportation and distribution (29%), media/marketing/advertising/pr & sales (29%) and manufacturing (29%) the most likely. These industries broadly mirror industries that are impacted by skills and labour shortages.

Overall, 17% of businesses plan to increase recruitment for temporary staff or freelancers and 26% plan to take steps to make recruitment pools more diverse in Q2 2024 (a significant increase from 11% in Q4 2023).

Almost 1 in 4 (23%) plan to increase recruitment spend on specialist roles, while 15% will do the same for non-specialist roles.