Hiring declines at fastest rate for three years

Political and economic uncertainty continues to affect the labour market as data from the Recruitment & Employment Confederation and KPMG showed that permanent placements fell at the quickest rate for more than three years.

Temporary recruitment remained weak, close to a six-year low, and total demand for staff rose at the weakest pace since the start of 2012, with both permanent and temporary vacancies rising more slowly.

Recruitment consultancies signalled that the number of people placed into permanent job roles dropped for the sixth month running in August, as employers delayed hiring decisions due to Brexit-related uncertainty.

Neil Carberry, REC chief executive, said: “Today’s figures are a sobering reminder to politicians of all parties that national prosperity relies on businesses creating jobs and growing careers. Britain’s record on jobs is world-leading. It’s a key part of our economic success, with recruiters at the forefront of it. And there are still great opportunities out there for those looking for a new job and a boost in earnings.

“But all this rests on business confidence – the confidence to invest, to hire someone, to try something new – and it’s clear that things are getting harder. Permanent placements have now dropped for six months in a row and vacancy growth is slowing. While we continue to benefit from the flexibility of our jobs market as demand for temps holds steady, today’s survey emphasises the real world impacts of the political and economic uncertainty businesses are facing.

“The first priority should be avoiding a damaging no-deal Brexit and giving some stability back to British businesses, so they can drive the prosperity of the whole country.”

Around 400 recruitment consultancies respond to the survey each month, which also signalled uncertainty on candidate numbers, with people reluctant to seek new roles in the current climate.

James Stewart, vice chair at KPMG, said: “Brexit uncertainty continues to take its toll on the jobs market, evident by the quickest drop in permanent placements in over three years as employers delay hiring staff.

“Given the current climate, it’s not a surprise but is still a concern to see that the demand for staff increased at the slowest rate since 2012 – and that people are reluctant to seek new roles. On the plus side however, the latest decline in staff supply was the least marked for over two and a half years amid greater competition, softening the pressures on pay.

“Looking ahead and with investment also contracting, businesses desperately need clarity on Brexit outcomes in order to re-build confidence in the jobs market and be able to make more informed decisions on their long-term hiring plans.”

Other findings in the September 2019 Report on Jobs include:

  • The slowest increase in total job vacancies since January 2012
  • Starting salaries for permanent workers continued to rise amid reports of greater competition for staff
  • Candidate availability deteriorated at the slowest pace for 32 months.

The Midlands, North and South of England all saw marked declines in permanent placements. London bucked the overall trend and saw a slight rise in permanent staff appointments in August.

Private sector permanent vacancies rose at the softest rate since January 2012, while growth of demand for temp staff eased to a 79-month low. In the public sector, permanent staff vacancies fell again, and temp staff demand rose only modestly.

The IT and computing sector remained top of the league of permanent staff demand, followed by hotel and catering. Vacancies in construction and retail, meanwhile, contracted again.

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