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 thirteenth straight month, and while solid overall, the rate of contraction eased further form August’s more than three-year record and was the softest since June.
The latest drop in permanent staff hiring continued to be linked to uncertainty over the economic outlook with recruitment freezes, delays to hiring decisions and fewer vacancies all highlighted by panelists.
In terms of regional movement during October, London saw an accelerated and rapid decline in permanent placements, with falls also seen in the North and South of England. Conversely, a fractional rise was recorded in the Midlands.
Meanwhile, the latest survey data revealed back-to-back increases in temporary billing during October, though the rate of expansion moderated from September and was only marginal overall. The panel highlighted a firmer demand for short-term staff due to greater flexibility, though budgetary pressures and fewer than anticipated projects dampened overall growth.
All regions monitored with the survey registered higher temp billings, bar the North of England which bucked the trend and saw a modest reduction. The highest growth was seen in London.
After declining slightly for the first time since February 2021 during September, the latest report pointed to stabilisation of overall vacancies in October.
The period signalled a second successive fall in permanent staff vacancies in October, though the rate of decline did ease to a fractional pace. The growth of demand for temporary workers meanwhile slowed to a modest pace that was the least pronounced since May.
A slight increase in demand for permanent staff was seen in the private sector during October which helped to offset a further reduction across the public sector at the start of the final quarter of the year.
Temporary vacancies continued to rise in the private sector with the rate of growth picking up slightly from September. In contrast, demand for short-term staff in the public sector fell solidly and to the greatest extent in over three years.
In terms of vacancy demand by sector, half of the ten monitored employment categories within the survey registered stronger demand for permanent workers during October, which was led by Nursing/Medical/Care. The Construction and Retail sectors meanwhile saw the quickest drops in permanent staff vacancies.
Temporary staff expanded in six of the ten monitored categories during October, again led by Nursing/Medical/Care, as well as Hotel & Catering. At the other end of the spectrum, the sharpest reduction in demand was seen for temporary Retail staff.
October saw a stronger rise in overall candidate numbers, with the survey data showing that the overall availability of candidates increased for the eight consecutive month.
Following a trend which has continued since March, the availability of staff to fill permanent positions across the UK increased during October, with the rate of expansion quickening to a rapid pace that was the third-sharpest since December 2020. This was attributed to a companies restructuring workforces and redundancies, as well as workers seeing new roles due to concerns over job security or to source better-paid positions. This upturn was recorded in all monitored regions, bar the North of England.
Meanwhile, October saw a sustained rise in the number of temporary candidates across the UK, and though the rate of increase edged down further from August’s 32-month record, this remained sharp overall. Where higher temporary labour supply was reported, panel members often linked this to company layoffs and fewer projects, in part, due to clients budgetary pressures. This rise was seen across all monitored regions, with the South of England noting the steepest rate of growth.
While the average starting salary awarded to permanent workers across the UK continued to increase in October, this growth was at the softest rate recorded in 31 months. According to panel members who were surveyed, this rise continued to be driven by competition for suitiably skilled staff and the higher cost of living which placed further pressure on pay.
Across the four monitored English areas, the quickest increase in starting salaries was seen in London, while the softest was registered in the South of England.
UK recruitment consultancies signalled a further rise in short-term pay during October, albeit at a growth rate only slightly stronger than September’s 31-month low. Anecdotally, this was attributed to attempts to attract and secure suitable candidates, however, greater pressure on client budgets did weigh on overall growth. All four monitored English regions registered this growth, led by the North of England.
Caution around permanent staff hiring persists in October amid economic uncertainty
A softer, but sustained fall in permanent staff appointments
Temp billings rise for a second straight month
Candidate availability expands at a sharper pace
Starting salary inflations slips to a 31-month low
Demand for staff stabilises in October
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