Hiring of permanent staff continued to decline in the UK, but a sharp rise in employee salaries shows signs of increased market confidence, according to the UK Report on Jobs from KPMG and the Recruitment and Employment Confederation (REC).
Permanent staff appointments have declined for 21 consecutive months, the report showed, but hiring of temporary workers rose, the first increase in that category since October 2023.
Neil Carberry, the REC’s chief executive, said that an increase in temporary staff rates signals increased economic confidence among employers as uncertainty subsides.
“Recruiters report companies delayed some permanent hiring decisions during the election campaign,” Carberry said in the report. “Now [that] a new government has been elected, recruitment firms are looking for that investment to be unlocked. … As policy uncertainty abates, and interest rates drop, we expect permanent hirers to return to the market this summer.”
The secretarial and clerical sector saw the steepest reduction in permanent vacancies, the report said, followed by the IT and computing sector.
Despite lingering economic uncertainty, permanent salaries observed the sharpest rise recorded since October and have now increased for 40 consecutive months, the report said. Employers are adjusting permanent and starting salary rates to attract qualified candidates and alleviate ongoing cost-of-living pressures, according to the report.
Temporary pay rates also continued to rise in June. “However, unlike permanent pay, the degree to which temp wages increased was the lowest since March,” the report said. “Where pay growth was registered, this was linked to cost-of-living expenses and a dearth of suitable candidates.”
The latest overall figures show “signs of momentum” for the UK economy, Jon Holt, chief executive and senior partner at KPMG in the UK, said in the report.
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