• Substantial increase in staff supply amid redundancies
• Pay pressures remain historically subdued
• Demand for workers declines at softer, but still sharp pace

Commenting on the latest survey results, Jon Holt, Group Chief Executive and UK Senior Partner KPMG, said: “At a time when global uncertainty is peaking and businesses are assessing the impact of market volatility alongside rising employment costs, the latest data demonstrates how the economic reality continues to weigh heavy on the labour market. With cost management a focus, those employers who are hiring are focused on securing the best talent, and while the rate of pay inflation has improved from last month’s four-year low, growth in starting salaries remains below the historic average. “Recent global events have put pressure on any growth prospects in the UK, so it is unlikely that we will see an improvement in the data in the near term. Therefore, redoubling employee engagement programmes and maintaining morale for existing employees, who will also be concerned about uncertainty in the market, will ensure that businesses are ready to take advantage of any green shoots when they do appear.”

Commenting, Neil Carberry, REC Chief Executive, said: “Activity in the UK jobs market has now been subdued for almost two and a half years. “A cyclical hiring upturn was always likely in 2025, but the near-term prospects for this have been made all the more uncertain by the actions of the US Government in upending the global trade system. We can’t ignore the immediate and second-order effects of this context even if the UK is better positioned than many nations to weather the storm. Announcing support for the auto sector is one thing but the faster we have clarity on how the industrial strategy will support all sectors the more likely employer sentiment on hiring and investing will remain stable. And it is even more important now that the Government reconsiders the scale of rising costs of employment after this week’s rise in National Insurance – a full review of the impact of the Employment Rights Bill, and changes to simplify compliance costs, would be welcomed by businesses across the country.”

The main findings for March are:

Hiring activity declines again in March
UK recruitment consultancies signalled a further reduction in hiring activity in March. Panel members frequently mentioned that economic uncertainty, tighter recruitment budgets and reduced client activity had weighed on staff hiring. Permanent placements have now declined in each month for the past two-and-a[1]half years, with the pace of reduction broadly unchanged from February and sharp. Temp billings meanwhile fell at the softest rate in three months, albeit solidly overall.

Supply of labour rises at fastest pace in over four years
The availability of staff increased sharply in March, with the rate of growth the quickest seen since December 2020. Recruiters noted steeper upturns in both permanent and temporary labour supply, with the former registering the sharper rate of expansion. The increases in availability were often linked by panel members to redundancies and fewer job openings.

Vacancies fall at softer, but still marked rate
Overall demand for staff continued to weaken at the end of the first quarter, with the respective seasonally adjusted index posting in contraction territory for the seventeenth month in a row. Though sharp, the pace of decline was the softest recorded since last October, as both permanent and temporary job openings fell at slower rates.

Pay trends remain historically subdued
The rate of starting salary inflation picked up from February’s four-year low, but remained comfortably below the survey’s long-run average in March. Concurrently, temp wage growth improved slightly to a three-month high, but was only modest. Anecdotal evidence indicated that while many employers increased pay to attract suitably-skilled candidates, panellists also acknowledged that tighter client budgets, muted demand for workers and improved staff supply had suppressed rates of growth.

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