Hiring at overall good level despite a drop in economic confidence

A new survey has revealed that despite reduced confidence among businesses and a weak economic outlook, hiring is at a good level overall.

The latest KPMG and REC UK Report on Jobs also shows that there has been a sharper rise in candidate availability with faster increases in the supply of both temporary and permanent workers.

Out of all monitored sectors, hotel & catering saw the steepest upturn in demand for contractors with strong rates of vacancy growth also noted for engineering and blue collar personnel.

Neil Carberry, REC Chief Executive, commented, “The jobs market overall remains fairly robust, with vacancies and pay still rising and unemployment low but there is a sense in today’s report that the economy will need some growth soon to sustain this positive picture.

“Permanent hiring has been slowing all year. To some extent this is normalisation as the post-pandemic boom abates – but it is also driven by uncertainty. This is seen in the scale of companies reshaping themselves while hiring in other areas – recruiters report that the quickest rise in labour supply since the pandemic has been driven by an increase in redundancies.

“But it is also obvious in the way firms are relying on temporary labour to keep things going in uncertain times. Temping keeps people in work when firms are uncertain about the future path of the economy – it is a huge UK success story.

Claire Warnes, Partner, Skills and Productivity at KPMG UK, added, “The latest survey results reflect the current Summer weather – damp, but with some possible bright skies on the horizon.

“Recruiters told us that their clients aren’t yet confident enough in the economic outlook to commit to permanent hires, leading to the steepest pace of decline in placements since June 2020. Conversely, the growth in billings for temporary workers weakened last month as job hunters hold out for permanent roles.

“Businesses are also still freezing hiring, with some redundancies, which led to the sharpest upturn in labour supply since December 2020. This is good news for recruiters who have an even larger pool of candidates to place, but with the number of vacancies available increasing at the slowest pace for nearly two and a half years, supply and demand are once again off balance.

“For job seekers, the ongoing competition for skilled workers and cost of living pressures are keeping starting salaries high, making it an attractive time to move roles, though they may be cautious about doing so.

“To rebalance the labour market and aid economic recovery, more focus on reversing the deepening skills gap would be a step in the right direction.”

To find out more about contracting please contact Sophie on 01206 591 000 or email sophie.lewis@contractoumbrella.com.