April’s KPMG and REC, UK Report on Jobs survey, compiled by S&P Global, signaled a further decline in permanent placements made by UK recruitment consultants.
There were reports of a heightened caution “amongst clients, with firms reportedly holding back on recruitment.”
However, the overall fall in placements “was noticeably slower, easing to the weakest for ten months.”
Similarly, temp billings declined in April, but “the rate of contraction was the slowest since January.”
Meanwhile, there was also a “weaker fall in demand for staff during April, both for permanent and temporary workers.”
Pay growth rates nonetheless strengthened. Permanent salaries “rose to the fastest degree in 2024 so far, whilst temporary wage inflation was the strongest for nearly a year.”
The report is compiled by S&P Global from “responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.”
There was a further fall in “the number of permanent staff appointments made by UK recruitment consultants during April.”
Placements have now fallen in each month “since October 2022, although the rate of decline in April was noticeably slower, easing to its weakest since June 2023.”
Temp billings also fell at “a softer rate (the weakest in three months).”
Panellists noted continued hesitancy “amongst companies in recruiting extra staff plus a lack of suitable candidates.”
Pay rates picked up during April as firms “remained willing to raise wages to attract suitable candidates.”
Latest data signaled that pay has “now increased for both permanent and temporary staff for 38 months in a row.”
For permanent workers, the rate of growth “accelerated to its highest in the year-to-date, though remained below its historical survey trend.”
Temporary staff saw their pay rates rise “at the steepest pace since June 2023 and to a degree that was slightly above average.”
April’s survey data showed “that overall demand for staff continued to fall, extending the current downturn to six months.”
That said, the rate of contraction “was modest and the slowest since January.”
Temp staff demand was down only “marginally and to a slower degree than for permanent workers.”
Candidate availability continued “to rise during April, with the rate of growth for all staff hitting its best for five months.”
Panelists noted a higher number of redundancies, “whilst also signalling a general increase in the number of people looking for work. Rates of growth in candidate availability were similarly strong for both permanent and temporary staff.”
As has been the case throughout the year so far, permanent candidate numbers “declined across all English regions during April.”
The steepest reduction was “again found in the South of England.”
Of the three English regions “that recorded a decline in temp billings, by far the steepest cut was seen in London. The Midlands bucked the broader trend, registering modest growth during April.”
Led by the Retail category, April saw “seven out of ten broad sectors covered by the survey register a drop in demand for permanent staff. Of the three sectors where growth was registered, the strongest rise was for Engineering.”
For temporary vacancies, half of the sectors covered recorded a fall in demand during April, with retail registering by far the steepest contraction. Of the five categories that saw growth, the strongest increase was seen for Blue Collar, followed by Engineering.
Jon Holt, Chief Executive and Senior Partner of KPMG in the UK, said:
“UK CEOs continue to grapple with the Bank’s hawkish stance on interest rates, and will no doubt hope April’s survey data is another marker in the sand on the journey towards a summer cut. While there are still complexities, like pay rates improving due in part to last month’s 9.8% rise in the National Living Wage, overall pressure is easing on the labour market.”
They added:
“Ongoing weak demand is driving the steady decline in permanent staff appointments month on month, and we’ve seen a sharp uptick in candidate availability. Business leaders see this cooling, combined with weakening inflationary pressure, as indicators for the Bank to hopefully shift to a more dovish position. Companies would then have the confidence and certainty to press go on their investment strategies.”