Labour market activity in the UK continues to move at a slow pace. Recruitment rates fell as employers take a restrained approach to hiring and employees grapple with continued declines in starting pay increases.
Following a period of rapidly rising pay rates amidst the higher cost of living and competition for highly skilled candidates, companies’ budgets are stretched, according to the latest UK Report on Jobs from KPMG and the Recruitment and Employment Confederation (REC).
In response to budgetary constraints, employer confidence has dropped, and many are reluctant to hire as cost concerns sit top of mind.
“The number of people placed into permanent jobs across the UK continued to decline markedly midway through the first quarter of 2024, as uncertainty over the economic outlook led employers to often delay or freeze hiring decisions, according to recruiters,” the report said.
Jon Holt, chief executive and senior partner at KPMG in the UK, said in the report that the impasse between economic uncertainty and hiring decisions continues to hold CEOs back from investment and growth.
The report, compiled by ratings firm S&P Global, includes responses collected in February from around 400 UK recruitment and employment consultancies.
Employees are adversely affected by unfavourable market conditions, the report said, as starting salaries showed the softest increase since March 2021.
Overall, demand for staff has dropped at the fastest rate recorded since January 2021, the report said, and the availability of workers continues to expand sharply. However, signs of growing demand for short-term staff suggest that conditions are beginning to stabilise in the public sector, according to the report.
Sectors in short supply of skilled workers, both permanent and temporary billings, are similar to the previous report. Industries mentioned include the accounting and financial sector, the executive/professional sector, blue collar industry, IT and computing, engineering, and more.
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