UK Report on Jobs: softer decline in recruitment activity at end of 2023

Recruitment intentions remained subdued as 2023 drew to a close, according to the latest KPMG and REC, UK Report on Jobs survey, compiled by S&P Global. Permanent placements and temp billings declined again in December, albeit at softer rates than in November, as employers maintained a cautious stance regarding hiring amid the weaker economic climate.

At the same time, overall vacancies fell slightly for the third time in the past four months.

The supply of candidates meanwhile continued to rise sharply, despite the rate of expansion easing from November's near three-year record.

Recruiters often mentioned that redundancies and lower levels of hiring activity had increased the pool of available candidates for both permanent and temporary roles. Nevertheless, competition for suitablyskilled workers remained a key factor pushing up rates of starting pay again in December.

The report is compiled by S&P

Global from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.

Although recruitment consultancies reported a further decline in hiring activity at the end of 2023, both permanent placements and temp billings fell at softer rates than seen in November.

Panel members often mentioned that muted demand for staff and recruitment freezes amid the weak economic climate had weighed on hiring decisions.

Permanent staff appointments continued to decline at a notably faster pace than that seen for temp billings.

Latest survey data indicated that the rate of starting salary inflation picked up from November and was sharp overall.

That said, the increase was the second-slowest recorded since March 2021 and below the historical trend.

Temp pay growth likewise quickened, climbing to a four-month high, but remained below the long-run average.

Recruiters commented that while competition for suitably qualified staff had contributed to further increases in pay, there were indications that employers' budgets were under greater pressure.

Candidate availability continued to rise at the end of the year, with panel members frequently mentioning that redundancies and a slowdown in hiring had pushed up labour supply.

Although easing from the near threeyear records seen in November, rates of expansion for both permanent and temporary candidate numbers remained rapid overall.

Total vacancies fell for the third time in the past four months during December.

That said, the rate of decline was little-changed from November and only marginal.

This reflected a slight reduction in permanent staff demand for the fourth successive month, while growth in temp vacancies eased to a 37-month low.

All four monitored English regions noted a decline in permanent staff appointments at the end of the year, with the Midlands recording the sharpest pace of contraction.

Trends for temp billings continued to diverge on a regional basis.

While the North of England and London recorded higher billings, declines were seen in the South of England and the Midlands.

Demand for permanent staff increased in the public sector during December, but fell further in the private sector.

Notably, this marked the first rise in public sector permanent vacancies for four months.

In contrast, demand for temporary workers continued to increase across the private sector at the end of 2023, albeit at a softer pace.

Short-term vacancies meanwhile continued to contract slightly in the public sector.