Recruitment slumps on weaker economic backdrop

by | Dec 8, 2023

(Sharecast News) – Recruitment fell sharply in November, an industry survey showed on Friday, as economic uncertainty saw employers cut back on hiring.
According to the latest UK Jobs Report from KMPG and the Recruitment and Employment Confederation, placements of both permanent and temporary candidates declined last month.

Permanent placements contracted at the second-quickest pace since June 2020, in the first months of the pandemic, while temporary hires eased after two months of expansion.

Starting salary inflation also fell, to a 32-month low, while the availability of workers rose for the ninth consecutive month.

Claire Warnes, partner, skills and productivity, at KPMG, said: “The balance of supply versus 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.

“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.”

Neil Carberry, REC chief executive, said: “2023 has been a testing year in our labour market.

“Anecdote from REC members supports our client survey finding that employers are considering coming back to the market, but that in many cases the activity will be next year.

“For policy makers, any return to growth will put strain on a labour market with embedded shortages. This week’s pro-election rather than pro-economy decision on immigration will exacerbate that.”

Earlier this week the government announced a raft of measures aimed at curbing immigration, after official data showed net migration had soared to a record 745,000 last year.

They include increasing the minimum salary needed for skilled overseas workers, to £38,700, while the minimum income for family visas also rose to £38,700.

The monthly UK Report on Jobs survey is sent to a panel of around 400 UK recruitment and employment consultancies. Responses are collected in the second half of each month.

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