The Report on UK Jobs is unique in providing the most comprehensive guide to the UK jobs market, drawing on original survey data provided by recruitment consultancies and employers to provide the first indication each month of labour market trends.
The main findings for February are:
February sees sustained fall in permanent placements
Permanent staff appointments across the UK fell for the fifth straight month in February, and at a slightly quicker pace than that seen in January. Recruiters often mentioned that clients adopted a more cautious approach to staff hires due to ongoing economic uncertainty. At the same time, billings for temporary workers continued to expand, albeit modestly.
Overall vacancy growth improves to four-month high
The latest survey indicated that overall vacancies continued to increase during February, with the rate of growth the best recorded for four months. Nevertheless, the upturn remained softer than that seen on average since the survey’s inception over 25 years ago. Underlying data signalled that demand for permanent workers expanded at a quicker pace, while temp vacancy growth softened slightly.
Softest fall in candidate supply since March 2021
Recruitment consultancies signalled that the current downturn in candidate availability continued to ease midway through the first quarter. Overall staff supply fell at a mild rate that was the slowest seen for nearly two years, which was underpinned by softer falls in both permanent and temp candidate numbers. Panel members often commented that workers were reluctant to seek out new roles in the current economic climate, while ongoing skill shortages also weighed on staff availability. However, some recruiters noted that the supply of workers had improved due to recent redundancies.
Rates of starting pay continue to rise sharply
The rising cost of living and difficulties attracting and securing suitably skilled staff drove further increases in starting pay for both permanent and temporary roles in February. Permanent starters’ salaries continued to rise at a quicker pace than that seen for temp pay, though in both instances the rate of growth was the second-softest for nearly two years.
Commenting on the latest survey results, Claire Warnes, Partner, Skills and Productivity 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. Nursing, care and medical topped the rankings once again with highest demand for workers – both temporary and permanent. These factors combined continue to play into pay inflation as employers try to compete with the rising cost of living. What the economy needs now more than ever is a skilled workforce.”
Kate Shoesmith, REC Deputy Chief Executive, said:
“This is further proof of ongoing demand in the UK jobs market, coming on the back of our most recent Labour Market Tracker report which showed new job adverts at a 14-month high in February. As hirers work out what variable economic forecasts might mean for their business and staff, it makes sense that we continue to see temp billings hold up so well. Temporary staffing ensures firms can continue to provide goods and services, and people can grow their careers – even when the economic outlook is unclear. Demand for staff continued to expand across both the private and public sectors. The rising cost of living, plus difficulties attracting and securing suitably skilled staff are also driving increases in starting pay. It will be particularly important to watch for any early trends coming from this data on regional disparities in supply and demand in the labour market.”
“What this latest Report on Jobs shows is serious labour and skills shortages are not behind us. The economy stands to lose up to £39 billion in GDP every year from 2024 unless business and government act now. Many businesses are doing what they can but the Spring Budget is the ideal opportunity to find a way forward together. The Chancellor must put people issues first, with innovative and refreshed policies on skills and tackling economic inactivity, and from immigration to childcare.”