Improved rates of pay for temporary workers

While recent findings show a mixed bag for UK workers, temporary wage growth has improved to a three-month high.

Research shows both permanent staff and contractors are experiencing a slight dip in demand.

However, the latest KPMG and REC UK Report on Jobs survey, compiled by S&P Global, has highlighted some signs of progress in the jobs market despite weaker confidence around the economic outlook and tighter client budgets.

Commenting on the survey results, Jon Holt, Group Chief Executive and UK Senior Partner KPMG, said, “At a time when global uncertainty is peaking and businesses are assessing the impact of market volatility alongside rising employment costs, the latest data demonstrates how the economic reality continues to weigh heavy on the labour market.

“With cost management a focus, those employers who are hiring are focused on securing the best talent, and while the rate of pay inflation has improved from last month’s four-year low, growth in starting salaries remains below the historic average.

“Recent global events have put pressure on any growth prospects in the UK, so it is unlikely that we will see an improvement in the data in the near term. Therefore, redoubling employee engagement programmes and maintaining morale for existing employees, who will also be concerned about uncertainty in the market, will ensure that businesses are ready to take advantage of any green shoots when they do appear.”

Neil Carberry, REC Chief Executive, added, “A cyclical hiring upturn was always likely in 2025, but the near-term prospects for this have been made all the more uncertain by the actions of the US Government in upending the global trade system.

“We can’t ignore the immediate and second-order effects of this context even if the UK is better positioned than many nations to weather the storm. Announcing support for the auto sector is one thing, but the faster we have clarity on how the industrial strategy will support all sector,s the more likely employer sentiment on hiring and investing will remain stable.

“And it is even more important now that the Government reconsiders the scale of rising costs of employment after this week’s rise in National Insurance – a full review of the impact of the Employment Rights Bill, and changes to simplify compliance costs, would be welcomed by businesses across the country.”

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