Recruitment falls at fastest rate since 2009

Covid-19 has hit recruitment activity hard as permanent and temporary placements both fell at the steepest rates since 2009 with employers cancelling or postponing plans to take on new staff.

The monthly Report on Jobs from the Recruitment and Employment Confederation (REC) and KPMG showed that the uncertainty over the economic outlook led to the first reduction in overall vacancies for over a decade.

The data, collected 12-25 March, showed that the availability of staff continued to decline, but at its weakest rate since 2013 amid reports of increased redundancies.

The report is compiled by IHS Markit from a panel of around 400 UK recruitment and employment consultancies. After increasing for the previous three months, permanent staff placements declined sharply in March, with participants citing that coronavirus had led many clients to cancel or postpone hiring decisions.

UK business needs to do what it can to adapt and survive this pandemic – and be able to emerge in the best position possible to ramp up once the crisis comes to an end” – James Stewart, KPMG

Temporary billings were also hit, with a combination of the virus and pending IR35 policy changes leading to the quickest reduction for 11 years.

Neil Carberry, chief executive of the REC, said: “The coronavirus pandemic has put the labour market on pause. It does mean massive disruption in the short term, but we need to remember that this has to be done in order to protect businesses and save lives.

“What we should be concerned about is how we stop that short-term disruption becoming longer-term economic depression. To do that we need to maintain employment levels as much as possible. Businesses in high cash flow sectors like recruitment and hospitality need to be able to access government support much more quickly than they currently can, or they will not be able to afford to furlough their workers.”

James Stewart, vice chair KPMG, said: “Firms are cancelling or postponing hiring decisions although, as you would expect, the demand for temporary healthcare professionals and manual labour workers saw a significant uptick.

“UK business needs to do what it can to adapt and survive this pandemic – and be able to emerge in the best position possible to ramp up once the crisis comes to an end.”

The research showed that while the private sector was badly hit, the public sector recorded an increase in both permanent and temporary vacancies.

Permanent staff demand declined across eight of the 10 sectors, led by retail and hospitality. Healthcare and engineering were the only sectors to record higher vacancies.

Any reading on the seasonally adjusted index above 50 indicates an overall increase in recruitment activity compared to the previous month. Below 50 represents an overall decrease. Permanent placements fell from a score of 52.9 in February to just 31.7 in March. In London it was even more marked, falling from 47.5 to just 20.3. Nationwide temporary placements declined from 49.7 to 35.6.

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