Commenting on the latest survey results, Jon Holt, Chief Executive and Senior Partner of KPMG in the UK, said:

“Recent Government warnings that the UK’s economy may weaken further before improving add to the overall sense of uncertainty, affecting recruitment plans. Firms holding back from hiring led to a sharp contraction in the number of people placed into permanent roles in August amid continued decline in demand, extending the downturn in the UK’s labour market…

“Both employers and job seekers are still facing a challenging period that will require careful long-term planning and adaptability”

Staff appointments continue to fall during August
August’s KPMG/REC Report on Jobs survey showed another reduction in permanent staff placements, extending the current downturn to 23 months. Moreover, the rate of contraction was the steepest since March amid reports of lower demand from clients and a lack of workplace vacancies. Temp billings also fell for similar reasons.

Slower growth in permanent staff pay
Permanent staff salaries increased again in August, in line with a trend that stretches back three-and-a-half years. Starting pay was generally raised to attract candidates, especially for positions where supply was limited. However, the increase in permanent pay levels was the weakest since March and well below the survey’s historical average. Moreover, temp pay rose only slightly and to the weakest degree for three-and-a-half years.

Staff demand down slightly again in August
Latest vacancy data signalled a marginal decline in vacancy numbers during August. It was the tenth month in a row that demand for staff has fallen, with slight declines seen for both permanent and temporary workers. Notably, August marked the first fall in temporary staff demand since April.

Strong growth of staff availability signalled
Staff availability continued to increase in August, both for permanent and temporary workers. Although similar, growth was the strongest in four months for temp workers but the slowest since February for perm staff. A mixture of redundancies and lower placement volumes reportedly led to the rise availability.

Figures from the Office for National Statistics (ONS)
Show a decline in vacancy numbers of 25,000 in the three months to July, when compared to the three months to April. Relative to 12 months’ ago, vacancy numbers were 140,000 lower. The overall number of vacancies was 884,00 in July – the lowest level for just over three years, but still well above the pre-pandemic level of 796,000 set in the three months to March 2020.

Vacancies by sector
Recruitment consultancies are requested to compare the demand for staff according to 10 sectors with the situation one month ago. Half of the sectors covered by the survey registered a decline in permanent vacancies. The steepest drop was for Tech Sector. Temp vacancies declined across seven sectors in August, with the steepest reduction seen for Executive & Professional. The Tech Sector also recorded a noticeable fall.

Permanent staff availability increases and strongest growth in temp availability since April.
For the eighteenth month in a row, an increase in permanent staff availability was recorded in August. The rate of growth was again steep, despite easing to its lowest level in half a year. A higher number of redundancies and a reduction in placements led to the rise in staff availability, anecdotal evidence showed.

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