Permanent staff placements in the UK increased in August for the first time since September 2022, according to the latest KPMG and Recruitment and Employment Confederation (REC) UK Report on Jobs.
Recruiters attributed the improvement to stronger market confidence and efforts by some employers to expand capacity, although uncertainty about the economic outlook and government policy continued to limit growth, the report said.
The monthly report is compiled from the responses of about 400 UK recruitment and employment consultancies.
The Permanent Placements Index, the report’s main hiring measure, signalled a marginal increase in permanent appointments. After stabilising in July, the number of people placed into permanent jobs increased during August. The index rose from the neutral level of 50 in July to 50.5 last month, marking the third consecutive month of higher index measures since the level dropped to 44.1 in May.
Temporary hiring also climbed again, with the report’s Temporary Billings Index rising from 51.9 in July to 52.4 in August. Recruiters said that employers continued to favour short-term and contract workers as they seek flexibility amid an uncertain environment.
Starting pay rose for permanent staff at the sharpest rate since January. Recruiters noted that some employers had raised salary offers to compete for highly skilled candidates or those with niche skills, the report said. Pay also rose for temporary staff but at a softer rate than July’s 26-month high.
The number of vacancies fell sharply, although the decline was the smallest in nearly two years.
Despite improvement in hiring activity, vacancies declined for a 34th consecutive month. At the same time, labour supply continued to increase as more people sought work, a trend recruiters associated with redundancies, fewer job opportunities, and concerns about job security.
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