Hiring has slowed in November with permanent staff appointments falling to 2020 levels and the supply of candidates expanding at the fastest rate since the end of 2020.
According to the newly released KPMG and Recruitment and Employment Confederation (REC) report for last month, a weak economic outlook led to lower rates of employment with sharp declines in permanent and temporary workers over the month. The fall in permanent hires was significantly higher than that of temps as employers sought to gain flexibility in the job market given the uncertain economy.
Vacancies fell slightly as the overall availability of candidates rose at a rapid pace. Coupled with these trends, pay pressures receded over the period with starting salary and temp pay inflation subsiding to 32- and 33-month lows respectively. The increase in permanent starters’ pay was at its lowest level since March 2021.
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Competition for skilled workers continued to push up pay overall but budgetary pressures at clients dampened overall growth.
There were several regional disparities. London saw the steepest reduction in permanent placements in England with the Midlands being the only region that recorded an increase, but temp billings fell in London and the south of England while rising in the Midlands and North.
Construction saw the steepest rate of decline, followed by the executive/professional category. Healthcare and engineering saw the strongest upturns in demand.
In terms of temporary staff, the hotel and catering sector recorded the fastest rise in demand for temporary staff, while retail saw the most significant fall in demand for staff.
For Claire Warnes, partner, skills and productivity at KPMG UK, the trends demonstrated that the balance of supply and demand was “out of sync”. She said: “We’re seeing even more people looking for work, with candidate supply rising at the fastest pace since the initial pandemic wave three years ago, but the number of available roles falling again in November. Employers are reining in hiring and continuing with redundancies in response to the sustained economic slowdown.”
She added that businesses were not seeing the certainty they needed as the backdrop remained one of “faltering economic growth” and warned companies would need to be resilient in the months to come.
Neil Carberry, chief executive of the REC, said he had detected more positivity about the new year as the REC’s client survey found that recruitment was more likely to take place in 2024.
He said the economic prospects were not helped by the government’s “pro-election rather than pro-economy decision on immigration” and called for a proper plan on workforce capacity “embracing better welfare to work support, finally reforming the apprenticeship levy and funding further education properly.”
Bar Huberman, content manager, HR strategy & practice at XpertHR, echoed Warnes’s view that the decline was in part “down to the mismatch between the skills people have and the skills organisations need”.
She added: “HR can help their organisations focus on developing skills internally, by working with their business partners to understand what work is coming down the line and what skills are needed to fulfil it. One of the ways organisations have been successful at building skills is experimenting with the internal talent marketplace, for example through giving more employees the chance to take on project work.”
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