April saw the softest fall in recruitment activity since last September, with a similar trend seen in temporary work.
Overall demand for staff weakened in April, as has been the case in each of the past 18 months, found the latest KPMG and Recruitment and Employment Confederation Report on Jobs. The rate of contraction quickened slightly since March, but remained softer than seen earlier in the year. Underlying data pointed to similarly sharp falls in both permanent and temporary vacancies.
Recruitment consultancies signalled a further substantial increase in the number of candidates seeking work in April, the survey found. The increase was the sharpest since December 2020.
According to panellists, the increases in staff supply were largely due to job losses amid company restructuring efforts and redundancies, as well as a reduction in recruitment activity.
The rate of pay growth was unchanged from March’s seven-month high, the findings revealed. However, the increase remained much slower than seen on average through the survey history (which began in 1997). At the same time, temp wage growth improved to the fastest in 11 months with panellists highlighting the inflationary impact of recent increases in the national living wage.
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The report said panel members often commented that employers were hesitant to commit to permanent hires due to greater economic uncertainty.
There were also reports that increased pressure on budgets amid higher payroll costs had dampened recruitment activity. Though sharp, the rate of contraction was the weakest recorded since last September. The south of England registered the steepest reduction in permanent staff appointments in April while London recorded the softest decline.
According to sector data, vacancies across the public sector declined at sharper rates than those seen in the private sector. Overall, the quickest reduction in demand for workers was seen for permanent staff in the public sector. The softest, but still marked, fall in vacancies was signalled for temporary private sector jobs.
Jon Holt, group chief executive and senior partner KPMG, said the softening in the pace of the hiring slowdown had failed to bring any green shoots for the jobs market in April. This was unsurprising, he added, with businesses facing global uncertainty and rising costs. The increase in starting salaries was a reflection of the new national minimum wage level taking effect, he added. Notwithstanding the fall in interest rates, speaking before the US trade deal was announced, Holt added: “Businesses will be looking for more signs of market stability before committing to any major spending.”
REC chief executive Neil Carberry saw some grounds for positivity: “Given the bow wave of costs firms faced in April, maintaining the gradual improvement in numbers we have seen over the past few months is on the good end of our expectations. While we are yet to see real momentum build, hopes of an improving picture in the second half of the year should be buoyed by today’s data.”
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