UK Jobs Report: Delayed Decision-Making, Lack of Demand Impact Recruitment Efforts

The KPMG and REC, UK Report on Jobs survey, compiled by S&P Global, pointed to another reduction in permanent placements made by UK recruitment consultants in May.

Delayed decision making and a lack of demand “amongst companies were reported to have weighed on recruitment activity.”

That said, May’s fall in permanent placements “was modest and eased for a second successive month to its weakest since March 2023.”

There was also a slower reduction in “the number of temp billings, with the decline the weakest since January.”

May’s survey also revealed “a drop in vacancy numbers, although the decline was fractional and the softest in the current seven-month downturn.”

Amid the high cost of living and shortages of “suitable candidates, pay inflation nonetheless remained marked.”

The report is compiled by S&P Global from responses “to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.”

May sees weaker decline in placements

Permanent staff appointments continued “to fall in May, according to the latest survey of UK recruitment consultants.”

It was the twentieth successive month in which “placements have fallen, but the latest decline was modest and the slowest since March 2023.”

A similar trend was seen for temp billings, with “the latest contraction the weakest in four months.”

There were reports that “slow decision-making, a lack of vacancies and specific candidate shortages weighed on placements.”

In other UK-focused updates, KPMG has commented on the final set of rules for the UK version of Solvency II.

Commenting on the publication by the PRA of PS10/24, the final set of rules for the UK version of Solvency II:

Huw Evans, Head of Insurance at KPMG UK, said:

“This is a case of evolution, not revolution. These rules ensure a more distinct UK Solvency II regime with some greater flexibility to invest in long-term assets such as infrastructure. Alongside this, are more complex rules policing the Matching Adjustment mechanism. The PRA’s creation of Solvency UK has made improvements that will work better for the UK than the original regime. With the EU having also made changes to Solvency II, there is nothing in the final UK version that would prevent it being deemed ‘equivalent’ to the EU’s regime in due course.”

As noted in the update:

“This final set of rule changes to Solvency II will only affect life insurance and insurers selling individual or group protection products in the UK that use the Matching Adjustment mechanism now or in the future.”

James Isden, Insurance Partner at KPMG UK, added:

“Insurers will welcome the new Matching Adjustment regime starting earlier on 30th June and will appreciate that the PRA did not delay publication of these much-anticipated rules because of the General Election. While the new rules will allow greater investment in assets with ‘highly predictable’ cash flows, the reporting, calibration and attestation requirements that will come with it are still onerous, especially for smaller insurers. Insurers who write group income protection will welcome the inclusion of in-payment group policies within the MA regime.”

Alisa Dolgova, Insurance Prudential Regulation Sector Head for KPMG’s EMA FS Regulatory Insights Centre, said:

“The PRA has been given significant new powers to police how insurers use the Matching Adjustment. The extent to which regulators use all the tools at their disposal to oversee use of the MA will partly determine whether these reforms achieve the stated objective of the Government to have a more flexible and internationally competitive regime.”

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