Hiring Remains weak as Uncertainty Increases Throughout October

Hiring Remains weak as Uncertainty Increases Throughout October

There has been a solid drop in permanent staff appointments with temp billings only slightly rising. Vacancy growth eases to 93-month low and pay continues to rise as candidate availability falls again.

According to the latest KPMG and REC, UK Report on Jobs data, recruitment companies across the UK are continued to experience lowered hiring trends throughout October.

Permanent staff activities fell solidly at the start of the fourth quarter, which was extensively linked to Brexit-related uncertainty, as many employers had chosen to stop or postpone hiring until there was greater clarity over the outlook.

Demand for staff was also relatively flat, with vacancies growing at the slowest rate for over seven years. An uncertain outlook also weighed on overall candidate availability, which fell at the quickest rate since June.

Reduced labour supply meant that employers had to up pay offers again, with starting salaries and temp wages rising.

Throughout the majority of 2019, the number of people placed in permanent roles fell during October. At the same time, temp billings growth weakened to only a marginal pace. According to panel members, political and economic uncertainty continued to dampen hiring activity.

October data signalled only a modest upturn in overall demand for staff across the UK. Notably, the rate of vacancy growth was the slowest seen since January 2012, with both permanent and short-term worker demand increasing at historically weak rates. 

An uncertain outlook also weighed on candidate availability during October, as people were reluctant to seek out new positions. Total candidate numbers fell at the sharpest pace for four months. This was largely driven by a steep fall in permanent labour supply, as the availability of temporary staff declined at a slower pace. 

Salaries awarded to newly-placed permanent staff continued to rise sharply in October, despite the rate of inflation easing from the previous month. Average pay for short-term staff also rose markedly. Increased pay offers were widely linked to a shortage of suitably skilled candidates. 

Permanent staff appointments declined suddenly across the Midlands, the South of England and London in October. However, the North of England registered a solid increase in permanent placements. Higher temp billings were recorded in the Midlands and the North of England, while declines were seen in the South of England and London.

The overall increase in staff vacancies in October was driven by the private sector, as demand for workers fell across the public sector. Growth of demand for both permanent and temporary staff in the private sector cooled and was notably weaker than this time last year. Permanent public sector roles fell solidly, while a modest drop was seen for temporary vacancies.

IT & Computing was the best performer in terms of vacancy growth, while Retail remained at the bottom of the rankings. 

Nursing/Medical/Care saw the sharpest increase in demand for short-term staff during October, followed by Hotel & Catering. The only two sectors to record reduced demand for temp workers were Executive/Professional and Construction.

James Stewart, Vice Chair at KPMG, said: “Businesses are still waiting to hear that starting gun, and until there is some certainty around Brexit and now the election, employers continue to stall on creating vacancies and making permanent hires”.