Permanent job placements at UK companies have fallen for the fifth month in a row, new figures show.
In February’s UK Report on Jobs from KPMG and the Recruitment and Employment Confederation (REC), recruiters reported that clients were adopting a more cautious approach to staff hires due to ongoing economic uncertainty. A continued shortage of candidates also contributed to the slowdown in hiring activity.
Placements of temporary workers continued to expand, albeit modestly.
The report is based on responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies across the UK.
Rates of starting pay increased further for both permanent and temporary roles, driven by the rising cost of living and the difficulties of attracting and securing suitably skilled staff. But while permanent starters’ salaries continued to rise at a quicker pace than that seen for temp pay, the rate of pay growth for both permanent and temporary workers was the second-weakest in nearly two years.
Recruitment consultancies indicated that the downturn in candidate availability continued to ease, with overall labour supply falling at the slowest rate for nearly two years. And vacancies data showed a relative improvement in the growth of demand for staff, helped by a quicker rise in permanent vacancies.
Commenting on the findings, Claire Warnes, Skills and Productivity partner at KPMG UK, said: “The current economic outlook continues to impact hiring activity as employers keep playing the short game by focusing on temporary hires, while permanent appointments fall for the fifth month in a row.
“Despite the rate of vacancy growth picking up to the best recorded in four months, candidate shortages remain, with recruiters citing hesitancy to move roles and longstanding, systemic skills shortages.”
Warnes added: “What the economy needs now more than ever is a skilled workforce.”
