Staff appointments expanded at their softest recruitment rate for 16 months in June 2022, as candidate shortages continued to limit hiring and greater economic uncertainty also dampened growth.
That’s according to the Report on Jobs survey by KPMG and Recruitment & Employment Confederation, which also found that clients were making slower hiring decisions.
The availability of staff meanwhile continued to deteriorate rapidly, with the rate of decline the quickest for three months. Efforts to attract and secure candidates led to further marked increases in starting pay, though rates of wage inflation slowed slightly since May.
At the same time, overall demand for workers increased at the slowest rate since March 2021.
Neil Carberry, chief executive of the REC, said: “The labour market is still strong, with demand for new staff high. That said, today’s data show that we are likely to be past the peak of the post-pandemic hiring spree.
“That pace of growth was always going to be temporary – the big question now is the effect that inflation has on pay and consumer demand over the course of the rest of the year.
“Whether we will see the market settle at close to normal levels, or see a slowdown, is unpredictable at this point.”
The REC’s report is compiled by S&P Global from responses to questionnaires sent to 400 UK recruitment and employment consultancies about their recruitment rates in June 2022.
Claire Warnes, head of education, skills and productivity at KPMG, said: “The supply of candidates in all sectors continues to decline, with the rate of contraction accelerating to the quickest for three months in June.
“Added to that, competition for candidates pervades all sectors with employers offering financial incentives to retain talent, so increasing wage inflation. This latest data could be signalling that the UK jobs market may be more fragile than it seems.”
Recruitment rates June 2022
Recruitment activity continued to expand across the country during June, with temp billings rising to a greater extent than permanent placements. Permanent staff appointments increased at the slowest rate for 16 months.
Although overall vacancies continued to rise at a historically sharp pace in June, the latest upturn was the least marked for 15 months. Softer rises in demand were signalled for both permanent and temporary workers at the end of the second quarter, with the former noting the quicker rate of expansion.
Today’s data show that we are likely to be past the peak of the post-pandemic hiring spree” – Neil Carberry, REC
Staff availability continued to decline at a severe pace in June. Recruitment consultancies often attributed lower candidate numbers low unemployment, fewer foreign workers, robust demand for staff and a hesitancy to switch roles in uncertain times.
The ongoing imbalance between the supply and demand for workers drove further steep increases in rates of starting pay during June. Though sharp and well above the series average, the rate of starting salary inflation eased to the softest since August 2021, while temp wage growth edged down to a 12-month low.
June’s survey data signalled steep increases in permanent staff demand across all 10 employment categories with hotel and catering seeing the sharpest upturn in vacancies, followed by IT and computing, and healthcare.
Carberry added: “Part of the reason for unpredictability in the market is a slower economy accompanied by severe labour and skills shortages. These are already proving a constraint on growth in many firms. The government should be thinking about how to ensure all its departments enable greater labour market participation and encourage business investment funds to help address this.”
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