Uncertainty over outlook weighs on job activity

The KPMG and REC, UK Report on Jobs survey, compiled by

S&P Global, has highlighted a further increase in recruitment activity during August.

However, the expansion in permanent placements was littlechanged from July’s 17-month low, while temp billings growth was the weakest seen for a yearand-a-half.

The recent slowdown in hiring reflected greater economic uncertainty, rising costs and candidate shortages, according to recruiters.

August survey data also signalled a further easing in vacancy growth, which slipped to an 18-month low.

Total candidate numbers fell at a slightly softer, but still rapid pace, which combined with the increased cost of living led to further sharp increases in starting pay for both permanent and temporary staff.

The report is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.

Average starting salaries for permanent staff continued to rise rapidly in August, though the rate of inflation softened further from March's survey record.

Notably the rate of salary growth was the softest seen for over a year. Temp wages meanwhile rose at a slightly sharper pace, albeit one that was the second-slowest since June 2021.

Higher rates of pay were frequently linked to intense competition for candidates and the rising cost of living.

The overall supply of candidates continued to fall sharply in August, with permanent worker availability deteriorating at a quicker pace than that seen for short-term staff.

A generally tight labour market, fewer foreign workers and a reluctance to seek out new roles due to uncertainty weighed on staff supply.

That said, the decline in total candidate numbers was the softest seen for 16 months.

Stronger increases in permanent placements in London and the Midlands helped to offset a slowdown in the South of England and a renewed fall in the North of England.

All four monitored English regions recorded marked increases in temp billings, with the quickest expansion seen in London.

Latest data signalled a further slowdown in vacancy growth across the private and public sectors in August.

The steepest increase in demand was seen for private sector staff – with permanent and temporary positions rising at identically sharp (albeit slower) rates.

The weakest increase in vacancies was once again signalled for short-term positions in the public sector, where growth eased to a 17-month low.

Nursing/Medical/Care topped the permanent staff demand league table in August, followed closely by Hotel & Catering.

The softest upturn in vacancies was once again signalled for Retail.

All 10 monitored job categories recorded higher temporary vacancies midway through the third quarter.

Nursing/Medical/Care signalled by far the steepest increase in demand for short-term workers, while Executive/Professional saw the weakest.

Neil Carberry, chief executive of the REC, said: “So it’s no surprise that pay rates continue to rise, especially considering increasing inflation.

“In this market, hiring companies need to think hard about the right approach to getting the skills they need, working with professional recruiters.”