Regionalisation – UK HR Labour Market Trends, March 2024
With jobs moving out of London, is this a permanent shift?
Key findings include:
- Comparing 2019 to 2023, London’s share of HQ vacancies fall to 41.2% from 47.8%
- Retail sees vacancies shift regionally at record levels, now just 31.6% in the capital
- With HR, in 2019, 58.3% of the roles were outside of London, by 2023 this had risen 68.8%
- Nationwide last year had only 13.4% of HQ vacancies in London, compared to 95% in 2019.
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As the sun sets on the pandemic period, the post economic settlement of that era is starting to take shape. In the immediate, this is now manifesting, as businesses shift roles away from the capital. Hence when analysing vacancies typically based at business headquarters, so finance, HR, marketing, IT management, office support, executive management and legal, what we see is that in 2019, 47.8% of HQ function vacancies were posted in London, whereas in 2023 that had dropped to 41.2%. This is according to the latest UK HR Labour Market Trends report by market data analysts Vacancysoft.
Tech shrinks as Retail roles move to regions
When analysing trends by sector, the immediate most striking shift is how the dip in recruitment in the technology sector meant that it fell from 20.2% of all national HQ vacancies in 2022, to 13.3% in 2023. The impact of quantitative tightening and the associated slowdown in VC/PE funding is apparent here. Otherwise, the variance between sectors is noticeable.
Retail & Consumer Goods & Services, which is the largest industry nationally in terms of vacancies for HQ functions, has seen a steady shift away from London. In 2019, 41.7% of vacancies were in the capital, with every subsequent year seeing the percentage fall, to the point where in 2023, this had fallen to 31.6%. We would therefore see this industry as being one of the most heavily influenced by this trend towards regionalisation within the UK.
HR roles see biggest regional shift over the five year period
In 2019, we saw 58.3% of the roles being outside of London, where by last year this had risen 68.8%. Just as importantly, inbetween we had seen that in every year during the period, the share of jobs being outside of London had risen. Nonetheless, the jump in 2023 still probably does have a cyclical element.
Nationwide lead the way on regionalisation, but BT increases their presence in London
Over the last ten years many major companies have made the headlines in terms of migrating functions, including BBC to Salford, HSBC to Birmingham and JP Morgan scaling up Bournemouth. Nationwide, which in 2019 had 95% of all HQ function vacancies in London, whereas by 2023 this had fallen to 13.4% making this the leading organisation in terms of shifting jobs out of the capital over the period. In contrast, BT has seen a rise in HQ function vacancies within London from 30.6% to 62.9% in the period.
James Chaplin – CEO – Vacancysoft – comments:
“The trend to regionalisation is undeniable, nonetheless it is far from universal as strategies vary by business. Nonetheless for policy makers looking to stimulate the London economy, these findings should cause concern. Occupancy ratios remain below pre-pandemic levels, meanwhile Manchester increasingly is positioning itself as the capital of the north. The question is, what needs to happen for the capital to be more attractive for business once more?”
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