Permanent job placements decline for first time since February 2021

Recruitment activity across the UK weakened at the start of the final quarter, according to the latest KPMG and REC, UK Report on Jobs survey, compiled by S&P Global.

Recruiters signalled a renewed drop in permanent placements and stagnant temp billings as heightened uncertainty over the economic outlook weighed on staff hiring.

There was a further slowdown in rates of vacancy growth for both permanent and temporary staff.

Greater hesitancy to look for or switch roles alongside a generally low level of unemployment led to a further steep drop in the supply of workers.

The sustained decline in candidate numbers and cost-of-living pressures continued to place upward pressure on starting pay.

However, rates of salary inflation and temp pay growth fell to 18- and 17month lows, respectively.

The report is compiled by S&P

Global from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies. Recruitment consultancies indicated that hiring activity waned at the start of the fourth quarter, as the number of permanent placements fell for the first time in 20 months and temp billings stagnated.

Survey respondents often mentioned that heightened economic uncertainty had led some clients to reassess their recruitment plans, while candidate shortages also dampened hiring.

Although demand for staff continued to increase in October, the rate of vacancy growth softened for the sixth month running.

Notably, the upturn in demand was the weakest seen since the current period of expansion began in February 2021, with both permanent and shortterm vacancies rising at slower rates.

The total supply of candidates fell sharply once again during October, despite the rate of reduction easing fractionally to the slowest since April 2021.

The decline in permanent staff availability remained more acute than that seen for temporary labour.

When explaining the latest drop in candidate numbers, recruiters commented that people had become more reluctant to switch or seek out new roles due to concerns around the weaker economic outlook, fewer foreign workers and a low unemployment rate.

Latest survey data pointed to a softening of pay pressures during October.

Although sharp overall, pay awarded to new permanent joiners increased at the slowest rate for a year-and-a-half.

At the same time, temp wage inflation slipped to its lowest since May 2021.

According to recruiters, starting rates of pay increased due to the rising cost of living and competition for staff.

Permanent staff appointments fell across all four monitored English regions in October, with London seeing the steepest rate of reduction.

The Midlands registered the quickest decline in temp billings of all four monitored English regions.

Fresh falls were meanwhile seen in London and the North of England, while the South of England bucked the overall trend and recorded a marked expansion.

Slower increases in staff demand were registered across both the private and public sector at the start of the fourth quarter, with only growth of permanent positions in the public sector ticking higher.

The weakest upturn in vacancies was signalled for temporary roles in the public sector, while the quickest was seen for permanent positions in the private sector.

Permanent staff vacancies continued to rise across all 10 monitored job categories in October, albeit at notably weaker rates than those seen a year ago in the majority of cases.

Nursing/medical/care topped the rankings, while retail was placed at the bottom of the league table.

Demand for short-term staff continued to rise across all 10 monitored job categories at the start of the fourth quarter.