A key observation raised by Jon Holt, Chief Executive and Senior Partner of KPMG in the UK, was that “employer confidence to recruit has not yet returned, leading to delays with permanent hiring and even a small contraction in the temporary market as worker contracts are not renewed. In the sectors where employers are still hiring, a lack of skilled talent continues to drive pay growth”

Some highlighted findings for July are:

Concurrent declines in permanent and temporary staff appointments
The KPMG/REC Report on Jobs data showed that permanent staff appointments continued to fall in July, albeit at a slower rate. A reduced number of vacancies and subdued demand for staff was reported to have led to the decline in placements. There was also a reduction in temp billings in July, although the rate of contraction was marginal. There was evidence of firms choosing not to replace workers whose contracts had expired.

Pay rates continue to rise
Despite making fewer appointments in July, companies continued to raise permanent staff salaries. The rate of inflation was again marked, though a little softer than in June and below the survey average. Panellists  noted that firms were willing to raise pay to attract workers amid a dearth of suitable candidates. Temp
pay also increased, although the rate of inflation was marginal and the weakest for nearly three-and-a-half years. Higher temp staff availability weighed on pay rates.

Marginal decline in demand for staff
Vacancy numbers in the UK labour market continued to decline during July extending the current period of contraction to nine months. The pace of reduction was however marginal and slower than in June. Moreover, there was some divergence between permanent and temp staff demand. Whereas the latter recorded slight growth, a modest contraction was seen for permanent workers.

Official data: UK job vacancies
There was a further decline in UK job vacancy numbers in the three months to June. Latest data from the Office for National Statistics (ONS) showed a fall of 30,000 compared to the three months to March. This meant that the overall number of vacancies fell to 889,000, its lowest level for three years. Compared to a year ago, vacancies were 150,000 down. However, the number of open positions remained higher than
the pre-pandemic level of 796,000 set in the three months to March 2020.

Permanent vacancies
Half of the sectors covered by the survey showed growth in permanent staff vacancies during July. The steepest decline in permanent staff was for IT & Computing. Areas in the Tech sector with weakest supply of skills include Electronic Engineers, Senior Electronic Engineers, Hardware and Mechanical Engineers.

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