Report on UK Jobs – May 2023
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 May are:
Economic uncertainty continues to dampen hiring activity
Lingering uncertainty around the economic outlook and delayed decision-making continued to weigh on staff placements midway through the second quarter. Permanent staff appointments fell for the eighth month in a row and at the quickest rate since January 2021. Temp billings meanwhile expanded at the softest pace since last October and only slightly.
Total candidate supply expands at steepest pace since December 2020
The overall availability of labour improved for the third month running in May. Furthermore, the rate of expansion was the sharpest seen for nearly two-and- a-half years, with recruiters often linking the upturn to redundancies and a slowdown in hiring activity. Permanent candidate availability increased at a sharper rate than that seen for temporary staff. The former rose at the quickest rate for 29 months, while the latter recorded the strongest upturn since February 2021.
Rates of starting pay rise at softer, but still strong rates
The higher cost of living and efforts to attract skilled staff continued to place upward pressure on starting pay during May. Salaries for newly-placed permanent staff rose at a historically sharp pace overall, albeit one that was the softest seen for just over two years. Temp pay growth also edged down since April, and was the second-slowest since April 2021.
Vacancies increase at slowest rate in 2023 to date
Growth of demand for staff slowed for the third straight month in May, with overall vacancies expanding at the softest pace since last December. Furthermore, the upturn was the second-weakest recorded since February 2021. Permanent vacancies increased at a faster pace than that seen for temporary roles, but rates of growth were nevertheless the slowest seen for five and 33 months respectively.
Commenting on the latest survey results, Claire Warnes, Partner, Skills and Productivity at KPMG UK, said:
“The jobs market remains subdued, with the latest survey results showing dampened hiring activity amid ongoing economic concerns. Overall vacancy growth slowed for the third month as businesses delayed hiring decisions, and permanent staff appointments fell for the eighth month in a row as many employers stick to temps. Businesses ready to grow can feel optimistic about an increasing pool of available candidates, which has expanded at the sharpest rate in two-and-a-half years. For job seekers there was more demand for permanent workers in the healthcare, financial and accounting sectors. And while temporary vacancy growth slowed, there are still plenty of opportunities, especially in the hotel and catering industries. It’s a tough time for employers, and what they really need is an up-skilled and re-skilled workforce which can move between sectors and quickly fill their vacancies. This will in turn aid economic recovery.The Government’s new Local Skills Improvement Fund scratches the surface of the problem, but more needs to be done to urgently address the UK’s widening skills gap.”