Hiring of temporary and permanent staff continued to decline in July, according to the latest UK Report on Jobs survey.
The decline in permanent staff placements extends the current downturn to nearly two years, while temp billings showed a slight drop as firms chose not to renew or replace expiring temporary contracts.
The pace of pay rises also slowed.
Permanent salaries continued to increase as employers remained willing to raise starting pay for suitable candidates, which in some cases remained in short supply. However, the rate of pay growth fell.
As demand for temporary staff dropped, temp pay rates rose only slightly and at the weakest level for nearly three and a half years.
Vacancy numbers across the UK labour market declined further in July, extending the current period of contraction to nine months.
The report from the Recruitment and Employment Confederation (REC) and accountancy firm KPMG is compiled by S&P Global based on a survey of 400 recruitment and employment consultancies.
“Despite the stability of a new government and easing inflationary pressures, employer confidence to recruit has not yet returned, leading to delays with permanent hiring and even a small contraction in the temporary market as worker contracts are not renewed,” said Jon Holt, chief executive and senior partner of KPMG in the UK. “In the sectors where employers are still hiring, a lack of skilled talent continues to drive pay growth.
“With forecasts for economic growth improving and potential further interest rate cuts over the coming months there are green shoots of economic recovery. But it’s still early days for this new government and businesses may be cautious to hit go on their full recruitment and investment strategies until they have heard more from the Chancellor in her Autumn Budget.”
