Filed under Press releaseTuesday, 08 October 2019
The latest KPMG and REC, UK Report on Jobs data showed that heightened political and economic uncertainty regarding Brexit continued to weigh on hiring activity at the end of the third quarter. Permanent staff appointments fell for the seventh month in a row, while temp billings rose only modestly.
At the same time, growth of demand for staff softened in September, with overall vacancies rising at the weakest rate since January 2012. The supply of both permanent and temporary candidates continued to decline, which was often linked to the fact that people were becoming more hesitant to seek new jobs. The sustained drop in candidate numbers led to further upward pressure on rates of pay. Notably, starting salaries rose at a sharp and accelerated pace. However, temp wages increased at a rate that, though solid, was the softest since November 2016.
The report is compiled by IHS Markit from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.
Permanent placements fall further in September
Demand for staff increases at slowest rate since January 2012
Vacancy growth eased for the second month in a row in September, with overall demand for staff rising only modestly. Notably, this marked the slowest expansion of vacancies since January 2012. Demand for permanent staff increased at the softest pace for 92 months, which offset a slightly stronger rise in temporary vacancies.
Availability of staff continues to fall sharply
September saw a further sharp fall in total candidate supply, despite the rate of contraction easing to the least marked since December 2016. Data showed that both permanent and temporary staff availability fell at the end of the third quarter, with the former seeing the steeper rate of reduction.
Permanent starters' salaries rise sharply
Regional and Sector Variations
All four of the monitored English regions bar the North of England registered lower permanent staff appointments in September. That said, the increase in the North of England was only marginal. The North of England and the Midlands both registered marked increases in temp billings during September, while the South of England saw only a slight expansion. Meanwhile, a reduction was seen in London for the second month in a row.
September data showed that demand for staff continued to rise across the private sector, but was relatively weak in the public sector. Permanent staff vacancy growth in the private sector eased to a 92-month low, which contrasted with a sharper rise in temp vacancies. In the public sector, there was a marginal rise in short-term staff demand, but permanent vacancies fell again.
The strongest increases in permanent staff vacancies in September were seen in IT & Computing and Hotel & Catering. Construction and Retail were the only monitored sectors to signal reduced demand for permanent workers.
Demand for temporary staff increased in seven of the ten monitored job sectors during September, led by Nursing/Medical/Care. Retail continued to signal the steepest decline in short-term vacancies.
Commenting on the latest survey results, Neil Carberry, Recruitment & Employment Confederation Chief Executive, said:
“Businesses are positive about their own prospects, but ongoing Brexit uncertainty has led many firms to delay projects and hiring decisions. Vacancy growth has fallen to its lowest since 2012. The UK’s vibrant temporary work market is playing an important role in helping employers to manage the ongoing uncertainty and job-seekers to find work.
James Stewart, Vice Chair at KPMG, said:
“The Brexit impasse continues to affect the jobs market with employers stuck, unable to make informed decisions, and people unwilling to risk seeking new roles.