Mini Budget Triggered Drop in Recruitment

Recruitment falls following Mini Budget as economic confidence drops.

Data from the Association of Professional Staffing Companies (APSCo) has shown that recruitment activity fell in the week after the Mini Budget as economic uncertainty hit the UK.

The data – provided by Bullhorn – revealed that the number of permanent jobs added the week after the Budget dropped -9 per cent when compared to the week before. Contract jobs also fell -9 per cent which suggests that the Mini Budget impacted economic confidence and, in turn, recruitment activity.

According to the report, vacancies dropped overall month on month in September for contract and permanent roles, down 7 per cent and 3 per cent respectively. Annual comparisons showed a similar picture, down 17 per cent for contract and 14 per cent for permanent placements between 2021 and 2022. This is indicative of a general quietening of the market both during the national period of mourning and following the uncertainty around the Mini Budget.

This slowdown in hiring activity has translated into a decline in revenue for recruiters during September, with sales figures for permanent placements dropping 7 per cent and 3 per cent on the contract side. Year-on-year data does show more promising figures, with revenue up 3 per cent for permanent sales. Contract revenue reported a greater spike, however, up 13 per cent between September 2021 and 2022. With placements only increasing 3 per cent for contract roles during this period, this uptick in revenue is likely indicative of the growing costs of contractors that UK employers are noting.

“The Chancellor’s Mini Budget certainly had an impact on the economy,” notes Ann Swain, CEO of APSCo. “While there were steps that we welcomed such as the repeal of IR35 regulation, it’s clear from this latest data that the announcement impacted the recruitment market, with hiring activity dropping in the week that followed the Chancellor’s statement. September was a month like no other for the UK, with the death of the Queen and a new Prime Minister all hitting the economy in short succession. We certainly hope that the recruitment market will pick up again in October, but with uncertainty still on the cards and skills shortages remaining a struggle for UK businesses, the final quarter of 2022 may not end on the highs we saw at the beginning of the year.”

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