Hiring starting to slow

Latest figures show that there is greater caution among employers with a sharper fall in permanent placements and a fresh decline in temp billings.

According to the KPMG and REC’s UK Report on Jobs survey, temp billings fell back into decline after two months of expansion, however, this was at a much softer pace compared to permanent staff appointments due to some employers seeking the flexibility of contract workers in the current economic environment.

Neil Carberry, REC Chief Executive, commented on the findings, “2023 has been a testing year in our labour market, with permanent hiring dropping and temporary hiring flat or growing only a little. That’s the story again in this month’s data, though the market is quieter overall as firms start to move activity into 2024 rather than pressing ahead now.

“The averages hide a great deal of variability in regions and sectors though. The Midlands and the North both saw strong performances for temporary and permanent roles, in sharp contrast with London and the South, with permanent hiring in London especially slow. The ongoing stronger performance of the private sector on new vacancies is also a notable positive signal.”

Claire Warnes, Partner, Skills and Productivity at KPMG UK, added, “The UK labour market remains tight as we move towards the end of a difficult year for the UK economy. The balance of supply vs demand is out of sync: 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.

“Businesses want to plan for the year ahead, but the prospect of faltering UK economic growth means the certainty they need isn’t there. This is now impacting starting salaries, as pay inflation isn’t as sharp as in previous months.

“Even temp staff billings – which have given much needed flexibility to employers in key sectors such as health & care and IT – are facing some contraction. And with the Bank of England looking like it will be keeping interest rates high for now, businesses will need to stay resilient to manage this period of flux.”

To find out more about contracting please contact Jaime on 01206 591 000 or email jaime.thorpe@contractorumbrella.com.