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 March are:
Quickest drop in recruitment activity since 2009
After rising in the prior three months, permanent staff placements declined sharply in March, with the rate of reduction the sharpest since February 2009. Panel members cited the COVID-19 pandemic had led many clients to cancel or postpone hiring decisions. Temp billings were also hit, with a combination of the virus and pending IR35 policy changes leading to the quickest reduction in billings for 11 years.
Demand for staff falls for first time in over a decade
Vacancy trends also deteriorated during March as the pandemic hit firms’ appetite for staff. Demand for both permanent and temporary workers fell for the first time since the global financial crisis in 2009. Permanent staff vacancies fell at a quicker pace than temporary job openings, but rates of contraction were mild in both cases.
Candidate supply contracts only modestly
Recruitment consultancies signalled only a mild drop in candidate availability at the end of the first quarter, as there were some reports of redundancies due to COVID-19. Notably, permanent staff supply fell at the softest pace since June 2013, while temp candidate numbers expanded at the quickest rate since July 2012.
Slower increases in permanent and temp pay
The increasingly uncertain outlook and reduced demand for staff weighed on pay growth during March. Starting salaries rose at the weakest pace since July 2016, while temporary wage inflation eased to its slowest for just over seven years.
Commenting on the latest survey results, James Stewart, Vice Chair at KPMG, said:
“Unsurprisingly, COVID-19 has already impacted the UK jobs market with recruitment activity falling away as uncertainty grips the nation. Firms are cancelling or postponing hiring decisions although, as you would expect, the demand for temporary healthcare professionals and manual labour workers saw a significant uptick. UK business needs to do what it can to adapt and survive this pandemic – and be able to emerge in the best position possible to ramp up once the crisis comes to an end.”
Neil Carberry, Chief Executive of the REC, said:
“The coronavirus pandemic has put the labour market on pause. It does mean massive disruption in the short term, but we need to remember that this has to be done in order to protect businesses and save lives. What we should be concerned about is how we stop that short-term disruption becoming longer-term economic depression. To do that we need to maintain employment levels as much as possible. Businesses in high-cashflow sectors like recruitment and hospitality need to be able to access government support much more quickly than they currently can, or they will not be able to afford to furlough their workers. This and other measures like government covering statutory sick pay for all firms will help people and firms to stay afloat now, and help the economy bounce back once the crisis is over.”