A stressed office worker. Credit: PeopleImages.com-Yuri A, Shutterstock.
The latest KPMG and Rec UK employment reports show that UK employment activity fell sharply in June, with permanent job hunting falling at its fastest pace in almost two years.
Compiled by S&P Global from around 400 recruitment consultants, the study found that uncertainty about economic outlook and budget constraints has led businesses to retake recruitment.
At the same time, the supply of candidates has skyrocketed – the most sharp increase since November 2020 (Covid Era) – amidst reports of weak demand for workers.
“The ongoing geopolitical turbulence and the threat of rising costs, along with technological efficiency promises, means businesses are waiting for employment, but there have been recent government commitments, such as house buildings and infrastructure.
He said, “While global headwinds will continue to impact the overall economic outlook as we move towards the second half of the year, the clear priorities set forth in the industry and trade strategies and growth of the services sector should provide confidence that business leaders will need to start planning future investments and consider recruiting activities.”
A decline in employment makes permanent roles the most difficult
Permanent staff appointments saw the sharpest decline since July 2023, but temporary claims also fell at the fastest speed since February. The vacant recession was the most severe in its permanent role, but the temporary position fell at the slowest pace in 10 months.
The southern England saw the sharpest regional declines in both permanent and temporary placement.
Wage growth slows
More candidates will be available, employers will tighten their budgets and pay growth to cool down. Starting salaries and temporary wages increased modestly at weaker rates than historical trends.
Industry winners and losers
Industry-wide, retail has seen the sharpest decline in demand for permanent staff among the eight categories reporting declines. The rise was mild, but it was the only sector that recorded a permanent increase in vacancy.
As for temporary roles, retail and secretary jobs showed the biggest decline. Construction has defied trends and recorded strong growth in its short-term position.
Neil Carbery, CEO of the Recruitment & Employment Coalition (REC), said there are concerns about further increases as employers hire carefully, “the scar tissue left behind by the spring tax hike is several months a month in the job market.”
He added: “Clearness and transparency from the government are essential to building trust with the business and fostering recovery.”
Temporary vacancies are resilient in the private sector, with some industries such as construction, logistics, engineering and healthcare still adding roles, but both KPMG and REC have warned that there is a need for broader trust before they can be hired again.
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