The Big Picture
It will surprise nobody to hear the employment market has been tough for a while now. The headwinds are well known: geopolitical instability, high inflation and low growth, a large budget deficit, cautious business outlook, increased costs of hiring – the list could go on.
Despite this, the UK economy’s performance has been much like a mid-range pillow: soft, but not quite down. Growth has been less disappointing than anticipated[1][2], and it appears reports of the UK’s productivity death were greatly exaggerated.[3][4]
Similarly, there are signs of life in the job market – the latest REC/KPMG report highlights a rise in permanent placements (the first since Sep 2022), while temp billings marked a fifth consecutive month of growth.[5]
Nevertheless, a big picture view always obscures nuance. Different sectors face different challenges and opportunities, which don’t always sit neatly in a macro summary.
This article is an attempt to look beyond the headlines and answer the question: “how are the sectors that we serve faring?”
Membership Associations & Professional Bodies
Sentiment
Membership associations and professional bodies are slightly chimeric creatures, with no two exactly alike. They occupy a unique position in the economy: part charity, part commercial, and to differing extents advocacy group, research body, standard setter and community group. In the majority of cases, their fortunes are dependent on members continuing to see the value in their annual subscription.
On that front, the news is reasonably encouraging. MemberWise’s benchmarking of the UK’s 100 largest membership bodies found overall membership numbers rising.[6] But while there is an evident robustness to the largest organisations in the sector, the challenges faced echo those in the wider economy. Costs are rising, margins are tightening, and the wider business environment motivates caution over champagne. The report concludes that subscription fees will need to rise, and that more emphasis will be needed on delivering member value to smooth the path for those rises.[6] Given member retention is consistently reported as the principal challenge facing the sector,[7] this will be something of a tightrope walk.
Job market dynamics
As is covered in the full report, we have used vacancy rates as a key data point in assessing job market dynamics.
Briefly, the vacancy rate is the number of unfilled job vacancies divided by total jobs (both filled and unfilled). A high vacancy rate indicates a tight labour market, where job vacancies are abundant relative to people. Conversely, a low vacancy rate means lower demand for staff. Vacancy rate is therefore one of the clearest barometers for how employer demand stacks up against employee availability.
Membership associations and professional bodies don’t have their own ONS category, so we have used “other service activities” as a rough proxy, while employing other data points to get a better understanding of the market dynamics.
With the caveat that the “other service activities” category is the loosest fit of any sector covered here, the ONS vacancy rate stands at 2.0% – well below its long-run norm, and the second weakest of our sectors on that measure.[8] Like much of the wider economy, here the flurry of the post-pandemic recovery has made way for a slow-release puncture, with vacancy rates trending downwards since 2021.
Membership bodies draw on similar talent pools to non-profits and professional services. They tend to compete with private sector employers more for commercial, finance and digital roles, and with non-profits more for policy, governance and engagement roles. By looking to these areas, we can tentatively triangulate the job market dynamics in this subsector.
Despite having a tough start to the year with declining vacancy numbers,[9] non-profits reported much stronger hiring intentions for the coming quarter than the rest of the economy.[10] As a result, membership bodies may find greater competition for policy, governance and engagement roles than hitherto.
In contrast, private sector employers are less inclined to recruit than at any point since 2016 (pandemic aside)[10], while both the financial services and professional, scientific and technical services sectors have recorded over 10% YoY declines in vacancies.[8] Taken together, the implication is that membership bodies face less competition for commercial, finance and digital roles than before, presenting a real opportunity to pick up talent in these areas.
Membership Associations & Professional Bodies: the bottom line
The largest membership bodies are proving resilient, with membership numbers rising. But rising costs and tight margins mean subscriptions, and the value members get for them, will come under scrutiny. Vacancies have drifted below their long-run norm, and the picture differs sharply by role.
For employers: with private sector hiring intentions at their lowest in a decade (pandemic aside), this is a good moment to recruit commercial, finance and digital talent. Expect stiffer competition from charities for policy, governance and engagement roles, though.
For candidates: commercial, finance and digital professionals may find membership bodies a welcoming alternative to a cooler private sector. Policy and engagement specialists, meanwhile, are in demand from both membership bodies and charities.