As KPMG and the Recruitment & Employment Confederation release their latest comprehensive guide to the UK labour market, we summarise the topline takeaways from the report.
Permanent staff appointments continued to fall for the twelfth straight month, though the 38-month record decline which was seen in August softened, and was the slowest since June. This decline continued to be linked to uncertainty over the economic outlook and the subsequent slowdown of staff hiring, with many noting recruitment freezes and efforts to control costs. This fall was noted across all regions, though in all cases rates of contraction slowed from August.
Meanwhile, after a slight reduction in August, temp billing increased across the UK at the end of the third quarter, and though modest, was the most pronounced rate of expansion since April. The report suggests this is due to some companies preferring the flexibility of temporary workers over permanent, though tighter financial conditions and high inflation had weighed on overall growth. During this period, all areas monitored registered an increase in temp billings, bar the South of England, with the quickest expansion seen in the capital.
The latest report pointed to the first reduction in overall demand for workers since February 2021, though the rate of decline was only slight.
The period signalled a fresh fall in permanent vacancies during September, and though marginal, it marked the first reduction in just over two-and-a-half years. Concurrently, growth of demand for temp staff moderated to a four-month low.
Demand for permanent staff fell across both the private and public sectors during September, with the public sector noting by far the steepest rate of decline.
Divergent trends were meanwhile seen for temp vacancies, with demand for short-term staff rising at a softer, yet solid, pace in the private sector, but decreasing in the public sector.
The data revealed a continued increase in overall availability of staff across the UK in September, albeit with the softest expansion rate since April, with the data showing slower increases in both permanent and temporary candidate numbers.
The availability of workers for permanent roles continued to increase at the end of the third quarter. Though sharp, the rate of growth slowed for the second month running and was the least pronounced since April. Restructuring and redundancies were the principal cited for the upturn in candidate availability, along with candidates seeking hybrid work or better financial compensation. This upturn was recorded in all monitored regions, led by the North of England.
The supply of short-term staff across the UK continued to rapidly expand in September, with growth close to August's 32-month record. The report suggested a slowdown in market conditions and company layoffs underpinned the latest upturn in temp candidate supply. The sharpest increase was recorded in the South of England, and the softest in the Midlands.
The average starting salary awarded to permanent workers across the UK continued to increase in September, and although, was at the softest rate since March 2021. According to panel members who were surveyed, competition for skilled workers and the rising cost of living all continue to drive this increase. Across the four monitored English areas, London was the only region to register a sharper rise in permanent pay compared to August
UK recruitment consultancies signalled a further rise in short-term pay during August, stretching the current period of wage growth to two-and-a-half years, albeit at the weakest growth rate since the current period of rising pay began in March 2021. Those surveyed commented that firms were generally having to offer higher pay to attract and secure candidates with desirable skills, though others noted that budgetary pressures had weighed on overall pay growth. During this period, London registered the quickest rise in temp wages.
Permanent placements decline at weakest rate in three months
Temp billings return to growth
Pay pressures ease as staff supply continues to increase
Overall vacancies fall slightly in September
Sign up to receive the full report here: Report on jobs :: The REC