Higher payroll expenses weighing on recruitment decisions
Pay growth remains modest in November
Demand for staff declines to greatest degree in over four years

Commenting on the latest survey results, Jon Holt, Group Chief Executive and UK Senior Partner KPMG, said: “Businesses are having to weigh up the prospect of increasing employee costs following the Budget, which has led to an accelerated slowdown in hiring activity across the board. While the data was already heading in that direction, permanent placements saw their steepest reductions in over a year last month, and temporary roles also saw a fifth consecutive decline. “This slowdown, alongside a growing availability of candidates in the market could put more downward pressure on wage inflation, which remained largely unchanged on last month’s 44-month low … the prospect of further rate cuts through 2025, alongside the Government’s investment plans, both point to improved growth in the near term. This should give businesses greater confidence which may help stabilise the labour market.”

Commenting, Neil Carberry, REC Chief Executive, said: “It should be a surprise to no-one that firms took the time to re-assess their hiring needs in November after a tough Budget for employers. The drop in vacancies was led by private sector permanent roles, and slower permanent recruitment billings across the month also reflected this trend. The real question now is whether businesses will return to the market as they go into next year with greater certainty about the path ahead…

Our 5 key takeaways from the report are:

Staff appointments tumble in November
November’s KPMG/REC Report on Jobs survey signalled an accelerated decline in the number of people placed in permanent positions by UK recruitment consultants. Overall, the fall was the steepest recorded by the survey since August 2023 amid widespread reports of reduced vacancies. Many respondents signalled that the government Budget in late October had led to uncertainty and the reassessment of staffing needs by clients. Similar factors led to a fifth successive decline in temporary staff billings.

Salary growth limited by reduced demand for staff
Permanent salary growth was little changed on October’s 44-month low during November. Whilst skilled candidates were often reported to be able to command higher salaries, pay growth tended to be limited by higher candidate availability and reduced demand for staff. Temp pay rates similarly increased only modestly, and to a slightly lesser extent than in October.

Steepest reduction in vacancies since August 2020
Vacancy numbers declined at a sharp and accelerated pace during November. It was the thirteenth successive month in which a fall in staff demand has been registered, and the latest drop was the greatest recorded for over four years. An especially severe drop in demand was seen for permanent workers.

Sharper increase in staff availability during November
Amid reports of a growing number of redundancies at clients, recruitment consultants signalled the steepest rise in overall staff availability for three months in November. Latest data signalled similarly sharp growth rates for both permanent and temporary worker supply.

Permanent vacancies
Permanent staff vacancies declined across all sub-sectors in November. Rates of contraction were generally faster than in the previous month and led by Executive/ Professional.

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