The election of a new government has not yet provided enough certainty for employers in the UK to move away from cautious hiring practices, according to the monthly UK Report on Jobs from KPMG and the Recruitment and Employment Confederation (REC).
Permanent staff appointments continued to fall in July, albeit at a slower rate, the report said. There was also a reduction in temporary billings in July, although the rate of contraction was marginal.
Vacancies for permanent staff continued to fall. The primary source of decline was reduced demand across sectors. It was the 11th successive month of declines, the report said.
Starting salaries rose in July, but at a lower rate than the previous month, and fell below the survey’s historical average, the report said. The rise in pay rates continues to reflect demand for skilled workers.
The nursing and medical care sector saw the strongest increase in permanent staff, the report said. The steepest decline in permanent staff was in the IT and computing sector.
Consequently, supply continues to exceed demand. Availability of candidates for both permanent and temporary positions continued to rise in July, but rates of growth were softer than in June, easing to the lowest in five months, the report said.
However, temporary vacancies in the private sector grew for the fourth consecutive month — to the highest levels since October 2023.
The Total Staff Availability Index registered at 59.9, down from 61.0 in June, and marked the 17th successive month in which candidate availability has risen, according to the report. Higher staff availability indicates a general reduction in demand as well as increased redundancies at firms.
Jon Holt, chief executive and senior partner at KPMG in the UK, noted that uncertainty continues to hold back recruitment and investment.
“While the Bank of England’s easing of interest rates will have provided a much-needed lift to businesses … the impact on the economic outlook will not be felt immediately,” Holt said in the report.
Temporary pay rates also rose again last month, the report said, but the rate of inflation was marginal and the weakest in the 41 months that rates have increased.
“The weaker growth in both salaries and [temporary] pay suggests that employers are keeping pay in line with inflation as the Bank of England want and the interest rate cut is welcome,” said Kate Shoesmith, the REC’s deputy chief executive. “Employers will need more of the same to maintain confidence.”
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