Companies in the UK continue to hold back on permanent hiring as cost pressures and market uncertainty shake employer confidence.
Last month, permanent placements declined at the sharpest rate since July, according to the UK Report on Jobs, a monthly report by KPMG UK and the Recruitment and Employment Confederation. The report’s main hiring measure — the Permanent Placements Index — dropped from 47.5 in April to 44.1 in May, falling further below the neutral level of 50.
Employers are finding more steady footing in short-term contracts to plug staffing gaps. Temporary work rose at the highest rate in over three years, as the report’s Temporary Billings Index climbed from 50.4 in April to 52.2 in May.
The survey, compiled by S&P Global, relies on responses from about 400 UK recruitment and employment consultancies from 12 May to 22 May.
A more pronounced drop in permanent job opportunities pushed demand for temporary staff, according to the report.
“Businesses need stability to plan and confidence to invest. With both still under pressure, the medium-term outlook for jobs remains subdued,” Jon Holt, group CEO and senior partner at KPMG UK, said in the report. “While some employers are turning to temporary contracts to retain flexibility, many permanent hiring plans are being delayed or put on hold.”
As a result, there was a steeper upturn in the availability of permanent workers. The number of candidates seeking new job roles increased at a higher rate in May, the report said.
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