The KPMG and REC, UK Report on Jobs survey, compiled by S&P Global, signalled a softening of UK labour market conditions during August.
Latest data showed that permanent placements “continued to fall, and at an accelerated pace, amid reports of reduced demand amongst companies for new staff. Temp billings also declined over the month, albeit only marginally.”
Permanent salaries meanwhile continued “to rise, but at the weakest pace since March and at a rate well below the survey’s historical trend.”
Concurrently, temp pay increased at the “weakest pace for three-and-a-half years.”
Reduced placements and slower pay growth “occurred as recruitment consultants registered a fall in vacancies for a tenth successive month.”
Staff availability also rose amid some “reports of increased redundancies.”
The report is compiled by S&P Global from “responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.”
August’s KPMG/REC Report on Jobs survey showed “another reduction in permanent staff placements, extending the current downturn to 23 months.”
Moreover, the rate of contraction was the “steepest since March amid reports of lower demand from clients and a lack of workplace vacancies.”
Temp billings also fell for similar reasons, “although the rate of contraction was again only marginal, and little changed since July.”
Permanent staff salaries increased “again in August, in line with a trend that stretches back three-and-a-half years.”
Starting pay was generally raised to attract candidates, “especially for positions where supply was limited.”
However, the increase in permanent pay levels “was the weakest since March and well below the survey’s historical average.”
Moreover, temp pay rose only slightly and “to the weakest degree for three-and-a-half years.”
Latest vacancy data signalled a marginal “decline in vacancy numbers during August.”
It was the tenth month in a row that “demand for staff has fallen, with slight declines seen for both permanent and temporary workers.”
Notably, August marked the first fall in temporary staff demand since April.
Staff availability continued to increase in August, “both for permanent and temporary workers.”
Although similar, growth was the strongest “in four months for temp workers but the slowest since February for perm staff.”
A mixture of redundancies and lower placement volumes “reportedly led to the rise availability.”
The steepest fall in placements was seen “in the South of England. In contrast, there was little change recorded in the North of England.”
Whereas there was growth in temp billings “in the Midlands and North of England, declines were seen in London and the South of England.”
Once again, half of the sectors covered “by the survey registered a decline in permanent vacancies.”
The steepest drop was for IT & Computing.
Conversely, of those categories that experienced growth, “the fastest increase was seen for Nursing & Medical Care.”
Temp vacancies declined across “seven sectors in August, with the steepest reduction seen for Executive & Professional. IT & Computing also recorded a noticeable fall. The strongest growth was for Blue Collar.”
As noted in the update:
“The news that while salaries rose last month it was at the weakest rate since March could help make the case for more rate cuts when the Monetary Policy Committee meets to decide the future path of interest rates. Both employers and job seekers are still facing a challenging period that will require careful long-term planning and adaptability.”
Neil Carberry, REC Chief Executive, said that August is a difficult market to judge because of the summer months but this supports what we have been hearing – employers continue to be cautious.
He added that it is clear that hiring is flat, but some regions are seeing better performance.