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UK job placements fall as labour shortages and economic uncertainty weighs

Job interview candidates
Respondents to REC/KPMG survey blamed tight labour market conditions, fewer foreign workers, and a greater hesitancy among people to take up new jobs due to increased economic uncertainty. Photo: Getty

UK job recruitment fell during November as businesses continued to suffer from labour shortages and concerns surrounding the wider economy.

According to the latest report from the Recruitment and Employment Confederation and KPMG, permanent placements declined for the second consecutive month, albeit at a softer rate than that seen in October.

Temp billings rose only modestly after broadly stagnating in the previous month in the run-up to Christmas.

The data was compiled by S&P Global from responses of a panel of 400 recruitment and employment consultancies. It also showed that overall vacancies expanded at the softest pace for 21 months.

Although candidate supply moved closer to stabilisation, dropping at the softest pace since April 2021, it continued to fall at a historically strong rate overall.

Permanent placements and temporary billings. Chart: REC, KPMG
Permanent placements and temporary billings. Chart: REC, KPMG

But competition for scarce workers and the rising cost of living continued to push up starting salaries and temp wages during the month. However, with that said, rates of inflation continued to ease, hitting their lowest for 19 and 18 months, respectively.

Respondents blamed tight labour market conditions, fewer foreign workers, and a greater hesitancy among people to take up new roles due to increased economic uncertainty.

The latest fall was the weakest recorded for just over a year-and-a-half amid softer declines in both permanent and temporary staff supply.

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On a regional level, three of the four monitored English regions registered lower permanent staff appointments in November, with the quickest reduction seen in London.

The Midlands bucked the trend, and recorded a fresh rise in placements, albeit one that was modest.

Temp billings continued to rise sharply in the South of England, and expanded modestly in London. Further declines were meanwhile registered in the Midlands and the North of England.

The steepest increase in demand for staff was for temporary workers in the private sector. In contrast, temporary vacancies in the public sector fell marginally for the first time since December 2020.

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Growth of demand for permanent workers meanwhile moderated across both the private and public sectors, but remained strong overall.

Eight of the ten broad job categories registered increased demand for permanent staff during November, led by nursing/medical/care, and retail. Vacancies were broadly unchanged in construction, while IT & computing noted a slight reduction.

REC and KPMG data on temporary vacancies this year compared to November 2021.
REC and KPMG data on temporary vacancies this year compared to November 2021.

“There are clearly some seasonal factors at work here, with retail and healthcare recruitment leading the way. But there may also be some switching to temporary going on, as firms maintain flexibility ahead of next year,” Neil Carberry, chief executive of the REC, said.

“The main way to boost performance is to unlock growth by businesses putting their people planning first, as a strategic way to enhance productivity. Government can help through skills and immigration reform. Boosting growth is the only way to ensure a prosperous country for all of us.”

Meanwhile, Claire Warnes, partner, skills and productivity at KPMG UK, said: “Employers who are able to offer existing workers and candidates opportunities to upskill and reskill, rather than focusing solely on core pay, may well benefit most in this tight jobs market.”

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