Starting salaries rose at their slowest rate for over three years in March, as candidate availability increased owing to redundancies and dwindling demand for staff.
The UK report on jobs for March 2024, from KPMG and the Recruitment and Employment Confederation (REC), showed that demand for permanent staff continued to decline, and has been doing so for a year and a half, while budget constraints resulted in fewer placements of temporary staff.
The permanent placements index across the UK was 43.3 while the temporary placements score was 45.7. A reading below 50 indicates a contraction.
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The total vacancies score was 47.2, up only slightly on the figure for February, with a marked decline in permanent jobs available in the public sector. Only the engineering and blue collar sectors reported an increase in permanent vacancies.
Despite employers’ hesitancy to recruit, there has been a rapid increase in candidate availability. The number of candidates has increased for the 13th month running and the latest rise was the steepest since November.
Starting salaries for both permanent and temporary workers increased only slightly in March. For permanent placements, pay increased at its slowest rate since 2021, the March 2024 UK report on jobs said.
Jon Holt, chief executive and senior partner of KPMG in the UK, said many organisations are delaying investment and relying on savings, but recognised that low levels of unemployment and falling inflation could pave the way for economic recovery.
“There are still headwinds, but it’s time for the UK economy to get its groove back – and UK businesses will be ready when the Bank of England makes its interest rate cuts. This may not lead to an instant rebound, but confidence to invest will increase, improving demand, and the economic outlook should start moving in the right direction,” he said.
REC chief executive Neil Carberry said: “Economic growth has been sidelined for too long and must be at the heart of this year’s General Election campaign. Today’s data shows the economy in a holding pattern waiting for inflation and interest rates to ease, so that firms can get to investing.
“The decline in permanent placements has been steady for some months now, with temporary recruitment still robust, if falling back from the record highs of 2022/3. Employers appear to be leaning on temporary work while they are uncertain about the path of the economy.
“The uptick in the need for blue collar staff may be a sign of consumer confidence starting to return – but it also emphasises again how labour shortages may constrain growth when it returns. A proper industrial strategy, with a meaningful and practical workforce element to it, is long overdue.”
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The report was compiled by S&P Global and is based on a survey of 400 UK recruitment and employment consultancies.
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