Recruitment rises, but only modestly

Hiring conditions improved at the end of 2019, with permanent staff appointments rising for the first time in a year,  but employers warned that growth was still modest and uncertainty still a factor, according to the latest KPMG and REC UK Report on Jobs.

The report found some firms had approved new hires following a long period of delayed decision-making and rising business requirements and fewer were using temp placements. However, it said rates of expansion were notably weaker than seen on average over the survey history and demand for staff was increasing “at a relatively sluggish pace”, with vacancy growth stuck near a decade low due to lingering uncertainty related to Brexit, alongside generally tight labour market conditions.

The report is compiled by IHS Markit from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.

The number of people available for new roles continued to decline sharply in December, with recruiters blaming lower candidate availability on lingering uncertainty and skill shortages. Permanent staff supply contracted at a quicker pace than that seen for short-term workers.

Starting pay rose further for both permanent and temporary staff at the end of the year, but the increases are still the softest seen over the past three years.

The report noted solid rises in demand for both permanent and temp staff in the private sector, though it said rates of growth remained historically subdued. In the public sector, vacancies rose for temp workers but fell for permanent roles.

Permanent vacancies rose in eight of the 10 sectors monitored by the survey at the end of the year. The steepest increases were seen in Blue Collar and Engineering. In contrast, Retail registered a further marked fall in demand for permanent workers.

James Stewart, Vice Chair at KPMG, said: “It would appear that following the clarity of the election outcome, the jobs market finally began to show signs of life with permanent placements rising for the first time in a year.

“However, growth was modest and coming off a historically low base so UK business will be hoping for quick government action to get the UK back on the path to growth including an investment in upskilling the workforce. Lingering uncertainty around the Brexit deal to be secured will continue to weigh on employers’ decision making around hiring and investment over the coming months, as well as job-seekers desires to seek new opportunities.”

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