Demand for staff continued to decline noticeably in January, according to the latest UK Report on Jobs from KPMG and the Recruitment and Employment Confederation (REC).
Vacancy numbers fell especially sharply for permanent workers, with the rate of contraction accelerating for the fifth successive month, the report said. Permanent vacancies have declined for 17 months in a row, and the drop from December to January was the sharpest in the report since the COVID-19 pandemic. Demand for temporary staff also declined for a sixth successive month, at the sharpest rate recorded since June 2020.
The monthly report’s main hiring measure, the Permanent Placements Index, remained below 40, though it rose slightly from December’s 39.5 to 39.8 in January. Indices with a reading above 50 indicate an overall increase and below 50 an overall decrease compared with the previous month. The index for permanent placements was 44.6 six months ago.
The Permanent Vacancy Index dropped from 42.7 in December to 41.5 in January. For temporary workers, demand fell from 45.4 in December to 43.3 in January.
Economic uncertainty has also affected pay. The rate of pay growth weakened in January, according to the report.
The latest data reflects “significant upcoming tax rises” facing employers, Neil Carberry, the REC’s chief executive, said in the report. He said that it will take time to build back business confidence in the region as uncertainty lingers.
The report noted that while employer confidence remains cautious, the overall outlook suggests gradual improvements in economic conditions and hiring intentions in the years ahead.
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