A report on December hiring and staffing in the UK shows a sharp decline in demand for permanent staff and an overall “weak mood” for businesses.
Those are two takeaways from the UK Report on Jobs from KPMG and the Recruitment and Employment Confederation (REC).
The monthly report’s main hiring measure, the Permanent Placements Index, declined to 39.5 from 40.7 in November. 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 44.9 in September.
Recruitment activity for temporary staff fell for the sixth successive month, the report said.
Vacancy numbers declined again last month, according to the report’s Permanent Vacancies Index. The index fell from 43.9 in November to 42.8 in December — the steepest drop recorded in more than four years.
The latest data indicates businesses tightening budgets following the UK government’s tax increase for employers, Neil Carberry, the REC’s chief executive, said, but he noted that the sentiment can change quickly.
“December is always a hiring low point, and a new year brings new hope — with inflation under control, low unemployment and economic growth expected, the fundamentals are better than many appreciate,” Carberry said in a news release.
Despite slow recruitment activity, there was a rise in permanent salaries in December. The report’s Permanent Salaries Index jumped to 53.1 from 52.6 in November.
The upturn reflects the rise in starting salaries as employers in the UK continue to prioritise attracting top talent, the report said, but an increase in the supply of candidates has somewhat limited salary growth.
S&P Global compiles the report from the responses of about 400 UK recruitment and employment consultancies.
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