A new survey has revealed employers are hesitant to recruit new permanent employees due to UK’s poor economic outlook.
In a survey of 400 recruitment agencies, 43 percent reported a decline in permanent hires in July, marking the steepest drop in recruits in the past three years.
Conducted jointly by KPMG and the Recruitment and Employment Confederation (REC), the study attributes it to “frequent reports” of job cuts and ongoing hiring freezes.
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The research underscored an increase in job seekers, while total available positions saw their slowest expansion over 29 months.
“Bright skies on the horizon”
Claire Warnes of KPMG said: “The latest survey results reflect the current summer weather – damp, but with some possible bright skies on the horizon.
“Recruiters told us that their clients aren’t yet confident enough in the economic outlook to commit to permanent hires, leading to the steepest pace of decline in placements since June 2020.”
She added: “Businesses are also still freezing hiring, with some redundancies, which led to the sharpest upturn in labour supply since December 2020.
“This is good news for recruiters who have an even larger pool of candidates to place, but with the number of vacancies available increasing at the slowest pace for nearly two and a half years, supply and demand are once again off balance.”
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The survey found wages for those who secured new permanent roles have experienced a “sharp rise,” amid competition from employers for skilled candidates and the mounting cost of living.
Neil Carberry, CEO of REC, said: “The jobs market overall remains fairly robust, with vacancies and pay still rising and unemployment low, but there is a sense in today’s report that the economy will need some growth soon to sustain this positive picture.
“Permanent hiring has been slowing all year. To some extent this is normalisation as the post-pandemic boom abates, but it is also driven by uncertainty.
“Hiring overall is still at a good level, and some sectors remain under pressure from significant labour shortages, including hospitality and construction.”
