Yahoo Finance UK job growth falls as recession fears mount
Employers are getting cold feet on the hiring front as figures show that permanent job offers are drying up and temp opportunities “stagnate”.
The number of people placed into permanent jobs by recruitment agencies has fallen for the first time in 20 months, according to the Recruitment and Employment Confederation (REC) and consultancy KPMG.
The survey of 400 recruiters found many mentioned that heightened economic uncertainty had led some employers to reassess their recruitment plans, while candidate shortages also affected hiring plans.
Hiring of temporary workers stagnated and wage growth for permanent new staff was its weakest in a year and a half.
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The steepest rate of reduction in permanent placements last month was in London.
REC’s employment index dropped to 45 last month, down sharply from September, meaning there are fewer vacancies. Any reading below 50 indicates most employers recorded a hiring reversal.
"The economic and political uncertainty of September and October has caused employers to become more cautious in their approach to hiring than during the frenzy of earlier in the year," REC chief executive, Neil Carberry, said.
"We will need to watch how this story develops over months to come, but so far this data suggests heightened employer caution, not a retreat from the market."
The survey also showed that pay pressure softened last month with pay awarded to new permanent recruits increasing at the slowest rate in 18 months. Wage inflation for temps also slipped to its lowest since May 2021.
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Claire Warnes, from KPMG UK, said: “The looming recession is clearly impacting the UK jobs market. Employers’ caution in hiring combined with fewer available candidates has resulted in the number of permanent placements falling for the first time in nearly two years.
“Now more than ever, it’s essential that we focus on upskilling the workforce to support and boost economic recovery when it comes. The jobs market will bounce back, particularly if we invest in the skills of the workforce across all sectors of the economy.”
Watch: What is a recession and how do we spot one?
