Hiring activity remains subdued despite increase in demand for staff

Ongoing political and economic uncertainty contributed to subdued hiring activity in July, according to the latest KPMG and Recruitment & Employment Confederation ‘Report on Jobs’.

The report, compiled by IHS Markit, reveals the number of people placed into permanent roles fell for the sixth time in the past seven months in July, albeit marginally, while temp billings growth weakened to a 75-month low, rising only slightly overall. Panellists attributed this subdued recruitment activity to lingering political and economic uncertainty.

Meanwhile, overall demand for staff continued to expand in July, with the rate of growth edging up to a four-month high. However, the increase remained among the weakest since late-2012, and while demand for permanent workers picked up slightly, temporary vacancies expanded at the slowest rate for seven years.

Recruiters registered a further decline in candidate availability, which was commonly attributed to a high employment rate and lingering market uncertainty. However, the decline in candidate supply was the least marked for two-and-a-half years, with both permanent and temporary staff numbers falling at softer rates.

Across the regions, permanent placements declined in London, the South of England and the Midlands, while the North of England registered an increase for the fifth month in a row. The South of England and London both registered higher temp billings, while declines were witnessed in the Midlands and the North of England.

The steepest increase in demand for permanent staff was once again across IT & computing, with the only sectors experiencing reduced vacancies were construction and retail. Trends weakened across all monitored sectors, however, compared to the same point last year.

Temporary staff demand rose across seven of the 10 monitored job categories in July, led by hotel & catering. Retail saw the largest overall reduction in short-term vacancies, while demand also fell away across executive/professional and construction.

Commenting on the findings, REC CEO Neil Carberry said: “Our flexible jobs market remains a key strength for the UK as we navigate an uncertain time. While we are seeing a concerning weaker trend in permanent placements bed in, the rate of change is slow, employment rates are high and starting salaries are growing. Businesses will be looking to politicians for a pragmatic way forward to help them turn this around – not just on Brexit, but on domestic policies too.

“The new government should be focused on delivering the negotiated exit from the EU businesses need, but also on avoiding damaging changes that will undermine the strength of our jobs market. An improved approach to immigration, reforms to the Apprenticeship Levy and avoiding hasty changes to contractor tax rules should be top of the list.

“In difficult times such as these, recruitment specialists are an invaluable source of local and industry expertise to businesses looking to hire new staff.”

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