Uncertainty Continues to Weigh on Staff Hiring Decisions in April

Key findings

• Permanent staff appointments fall slightly, but temp billings rise 
• Staff vacancies rise at the slowest rate since August 2012
• Candidate shortages continue to push up starting pay

The index measuring overall vacancies edged down further in April, to signal the weakest increase in demand for staff since August 2012. The softer expansion in total vacancies was predominantly driven by a slower rise in permanent staff demand. 

Availability of candidates declines again in April

 

A reluctance among workers to seek new roles due to uncertainty related to Brexit, as well as a generally low unemployment rate, led to a further decline in staff availability. That said, both permanent and temporary worker supply deteriorated at softer rates than in March.

Greater competition for scarce candidates contributed to steep increases in pay for both permanent and temporary workers. That said, the rate of starting salary inflation was the softest seen for two years. In contrast, temp wages rose at the strongest rate since January. 

Regional and Sector Variations

 

London recorded the quickest drop in permanent staff appointments of all four English regions. In fact, the North of England was the only area to see an increase in permanent placements during April. On a regional basis, the North of England noted the quickest expansion in temp billings, closely followed by the South. The Midlands meanwhile noted the first reduction for just over seven years.

April data continued to point to subdued public sector staff demand compared to the private sector. In the public sector, permanent vacancies fell slightly, but rose marginally for temp workers. Demand for permanent staff in the private sector meanwhile rose at a softer, but still strong, rate and strengthened for temp workers.

IT & Computing topped the rankings for permanent staff demand, closely followed by Nursing/Medical/Care and Engineering. However, the majority of monitored sectors noted softer increases in vacancies. Retail noted a sharper decline. 

The quickest increase in temporary staff vacancies was again seen in Nursing/Medical/Care in April. Blue Collar and Hotel & Catering completed the top three in the rankings. In contrast, short-term vacancies fell in Executive/Professional and Retail.

Comments

Neil Carberry, Recruitment & Employment Confederation chief executive, said:

“Today’s report shows the continued strength, agility and flexibility of the UK labour market. In uncertain times,employers are turning to temporary work to support their business and offer people opportunity while the long-term economic picture is unclear.

“There are signs that the jobs market is gently weakening for permanent roles, despite ongoing issues of skills and candidate shortages. This too is likely to be associated with uncertainty about the future path of our economy.

“We should be proud of how our jobs market has adapted to challenging circumstances. Resolving Brexit will bring some certainty, but we must also take bold steps to fix the underlying problems suggested by these figures, including reforming the apprenticeship levy to allow training for agency workers so that they can fill shortage roles.”

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

“This report shows how the UK jobs market has seized up, with both employers and candidates waiting to see which direction Brexit is going to go in.  For now, this smothers the prospects for growth and makes it a lot harder for companies looking to innovate. 

“Overall employers have hired fewer permanent staff in three of the past four months and most of the firms we’re speaking to say that uncertainty around Brexit is to blame.  A subdued public sector is also contributing to the wider picture.

“On the supply side, a high rate of employment and the apprehension of potential candidates means there just aren’t a lot of suitably skilled people out there to hire anyway.  This is an increasing problem for firms in technology, health, and engineering who are experiencing a skills gap.

“Concern over the long-term picture means now is a good time to be a temp’ with steep increases in pay for both day rate and short contract workers.”

Ends

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