The UK’s hiring freeze is getting worse
The UK saw a further reduction in recruitment activity in May as demand for staff fell to its softest rate in eight months.
This is according to a new report by the Recruitment & Employment Confederation and KPMG, which found that the availability of candidates has risen to its quickest pace in nearly four-and-a-half years amid reports of redundancies and fewer job opportunities.
At the same time, rates of starting pay increased further in May, although growth of both starting salaries and temp wages has remained weaker than on average.
The report is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.
A hiring freeze
Recruitment activity across the UK continued to slow in May, with survey members reporting that weaker confidence around the outlook and concerns over costs had dampened staff hiring. While permanent staff appointments fell at a slightly quicker and sharper rate, the downturn in temp billings slowed since April to the softest in six months.
Candidate availability continued to rise in May, with the rate of growth the steepest since December 2020. Recruiters signalled quicker increases in the supply of both permanent and temporary staff, with the former recording the sharper rate of expansion. There were frequent reports that redundancies and fewer job opportunities had pushed up candidate numbers in the latest survey period.
The sharpest reduction in permanent placements was seen in the South of England. The Midlands meanwhile bucked the wider UK trend and recorded the first increase in placements for a year (albeit marginal).
Engineering the stand out
Seven of the ten monitored job categories registered lower demand for permanent staff in May. Hotel & Catering saw the sharpest reduction in vacancies, followed by the Nursing/Medical/Care and Retail sectors. The strongest uptick in demand was seen in the Engineering category.
Engineering was the only monitored job sector to record an improvement in demand for temporary workers during May. Retail meanwhile saw the steepest drop in vacancies, with sharp contractions also noted across the Executive/Professional and Nursing/Medical/ Care sectors.
“More encouraging signs in temp billings, vacancies, and stabilising private sector demand offer a measure of optimism as we head into the second half of the year,” said Neil Carberry (REC Chief Executive).
“There are early signs of promise, particularly in the Midlands, which saw its first increase in permanent placements in a year and a rise in billings after four months. Meanwhile, the downturn in temporary billings has eased further in London and the North of England.”
The big test now is whether the Spending Review convinces more employers to dance at the party by turning intent on hiring and investing into action, he said.
“Spending Review delivered a big hit in terms of eye-catching spending on technology and energy, but the lack of announcements on workforce matters is badly out of step with its desire to build a deep pool of talent.
“With the Industrial Strategy imminent, businesses are looking for more than talk of renewal, they want a clear plan for an economic revival. One that acknowledges the central role of good workforce policy – beyond just employment rights. That means putting workforce matters at the heart of the agenda, not treating it as a compliance issue,” he said.
