Starting salary growth weakened to a four-year low in February, according to the UK Report on Jobs from KPMG and the Recruitment and Employment Confederation. Staff availability continued to outpace demand across UK companies.
The slow developments in pay and recruitment mark uncertainty from employers as they await significant tax rises in April, Neil Carberry, the Recruitment and Employment Confederation chief executive, said in the report.
“Enabling companies to grow is at the heart of our prosperity — the Chancellor must use the Spring Statement to build their confidence in growth.” Carberry said. Recruitment consultancies signalled a softer rise in starting salaries for permanent staff for the second consecutive month, the report said. The Permanent Salaries Index recorded a dip from 52.6 in January to 52.1 in February. Higher salaries reported were generally linked to an increase in market rates and efforts to attract skilled candidates.
For temporary staff, pay growth increased marginally for the fifth successive month in February, from 50.5 registered in January to 51.5, according to the Temporary Wages Index.
The latest data also revealed a stark decline in demand for both permanent and temporary jobs in the region. February data showed an accelerated upturn in staff availability amid redundancies and weaker demand for candidates across sector, the report said.
The rate of contraction was the second sharpest since August 2020, with a slight increase from 41.6 in January to 41.8, according to the Total Vacancies Index. Demand for staff fell across both the private and public sectors.
The number of people placed into permanent job roles across the UK also decreased again, according to the Permanent Placements Index. Whilst the rate of decline was the least pronounced in four months, it remained historically sharp overall.
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