Employers remain wary of hiring as ongoing economic uncertainty continues to affect business confidence.
The rate of contraction last month was the steepest since March, according to the monthly UK Report on Jobs from KPMG and the Recruitment and Employment Confederation (REC).
The decline in staff appointments is the 23rd consecutive month of decline in hiring in the UK, dating to October 2022, according to the report.
Staff availability continues to outpace demand across sectors. Permanent vacancies decreased in August, falling marginally and in line with July’s pace of contraction, the report said. August is the 12th consecutive month in which vacancies have fallen.
Demand for temporary staff fell slightly in August, the report said, the first time in four months that a reduction in temporary vacancies has been registered.
In response, staff availability climbed again in August for the 18th successive month.
“The Total Staff Availability Index recorded 59.8, down slightly [from] July’s 59.9 but nonetheless still indicative of a steep rise in availability that remained well above trend,” the report said
The IT and computing sector observed the steepest drop in demand, while the fastest increase was in the healthcare sector.
Temporary worker availability rose at the steepest rate in four months, the report said, registering at 59.9 in August, up from 58.4 the previous month — the highest climb in the second quarter.
One reason for the increase in temporary staff is the lack of permanent vacancies, the report said. Nearly one in three temp workers say that without temp work they would likely struggle to find any work.
Employers will remain cautious until the economy is on a more certain, sustainable path, noted Neil Carberry, the REC’s chief executive.
“The new government said growth was its main priority — but it needs to deliver now,” Carberry said in a news release. “We are encouraging the government to work with business to design changes that employers can work within and to reassure them that they aren’t taking risks by hiring now.”
Permanent pay levels in August fell significantly, the weakest growth in five months, the report said, drifting to the lows observed in March and well below the survey’s historical average.
Pay for temporary workers rose in August, but at the slowest pace in the three-and-a-half years in which inflation has been registered.
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