Further Decline

Permanent placements continue to fall sharply

Recruitment activity continued to decline in May, with the latest KPMG and REC, UK Report on Jobs survey showing further marked falls in both permanent placements and temp billings following record drops in April. Survey respondents frequently mentioned that the coronavirus disease 2019 (COVID-19) pandemic and subsequent company closures had led clients to cancel or delay hiring plans.

At the same time, reports of redundancies and furloughed staff led to the quickest increase in candidate availability since July 2009. However, a further marked drop in demand for staff, which was highlighted by a substantial drop in overall vacancies, led to steep falls in starting pay.

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

Permanent placements continue to fall sharply

May survey data indicated that hiring activity remained weak across the UK, as permanent placements and temp billings both fell at the second-sharpest rates on record. Recruiters frequently mentioned that the COVID-19 pandemic had led clients to cancel or postpone recruitment plans until the outlook improved.

Candidate supply rises at fastest pace since mid-2009

Recruitment consultancies signalled the quickest expansion in overall candidate availability since July 2009 during May. The upturn was driven by steeper increases in the availability of both permanent and short-term staff. Panellists often linked higher candidate numbers to redundancies and staff being placed on furlough due to COVID-19.

Starting salaries drop at steeper rate…

Permanent starter salaries fell for the second month running in May, and at the quickest rate since February 2009. Temp pay meanwhile declined at the fastest rate for 11 years. Recruiters often mentioned that weak demand for staff and budget cuts at clients had driven down pay in May.

… as demand for staff declines further

Overall vacancies fell at a substantial pace in May, despite the rate of reduction easing from April’s survey record. Marked drops in demand continued to be signalled for both permanent and temporary workers, with the former noting the steeper rate of contraction.

Regional and Sector Variations

Permanent placements fell sharply across all four monitored English regions in May, led by the North of England.

Temp billings fell at softer, but nonetheless severe, rates across each of the four monitored English regions. The quickest fall was seen in the South of England.

Demand for staff declined across both the private and public sectors during May.  The steepest reductions in vacancies were once again seen in the private sector, though demand for public sector staff also fell at a historically sharp pace.

Nine of the ten job categories registered a fall in demand for permanent staff during May. The steepest reduction was seen in Retail, closely followed by Hotel & Catering. Nursing/Medical/Care was the only sector to record higher vacancies.

Sharp falls in demand for temp workers were seen across all job categories except Nursing/Medical/Care midway through the second quarter. The most marked deteriorations were signalled for Hotel & Catering and Retail employees.

Comments

Commenting on the latest survey results, James Stewart, Vice Chair at KPMG, said:

“Lingering uncertainty around the COVID-19 pandemic, and when the outlook may improve, continues to take its toll on the UK jobs market.

“Hiring plans which were put on hold in March remain on ice, with many businesses focusing on maintaining their current staff rather than expansion or replacement.

“The number of people looking for work has risen at the quickest rate since July 2009 making it a highly competitive market. With a potential July stimulus package from the Government set to include a focus on retraining and skills, adaptability will be the key to success for jobseekers in 2020.”

Neil Carberry, Chief Executive of the REC, said:

“Given the impact of the lockdown in early May, it’s no surprise that these figures look bleak. But in the two weeks since this data was collected, lockdown rules have been eased and the feedback we get from recruiters every day suggests that the slight improvements that we can see in the placements and vacancies data have continued. I’m also hearing from business leaders all over the country that things are starting to look up. There is a long way to go, but it’s time to talk about how we recover from this crisis.

“Collaboration between government, businesses and recruiters will be vital as we try to get the economy up and running again. The UK’s staffing and recruitment companies are experts at helping people find work, and we are ready to support jobseekers in the months ahead.”

 

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More