Yahoo Finance UK jobs market cools down as starting salaries lose momentum
London leads fall in permanent staff positions
The UK's red-hot jobs market is showing signs of cooling as starting salaries for permanent staff rose at the weakest pace in over two years.
A monthly survey by KPMG and the Recruitment & Employment Confederation found the number of permanent staff placements dropped last month at the sharpest rate since January 2021.
It also suggested growth in starting salaries had begun to slacken, although the survey still pointed to pay growth well above historic trends.
The higher cost of living and shortages of skilled candidates drove sustained increases in starting pay for permanent and temporary staff, said the report.
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Claire Warnes of KPMG UK said: “The jobs market remains subdued, with the latest survey results showing dampened hiring activity amid ongoing economic concerns.
“Overall vacancy growth slowed for the third month as businesses delayed hiring decisions, and permanent staff appointments fell for the eighth month in a row as many employers stick to temps.
“It’s a tough time for employers, and what they really need is an upskilled and reskilled workforce which can move between sectors and quickly fill their vacancies. This will in turn aid economic recovery.”
The drop in permanent placements was broad-based among the four monitored English regions, led by London. Temp billings rose sharply in London and the South of England but declined in Northern England and the Midlands.
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Neil Carberry, REC chief executive, said: “We’ve been hearing more and more about differences between sectors in hiring rates over the past few months, and today’s data really highlights this.
“While hospitality, healthcare and engineering remain strong, construction, IT and retail are all weakening.
“For hiring businesses, greater candidate availability will help resolve shortages, though inflation means wage growth remains high. In addition, candidates may have to change sectors in their job search, so there is not an automatic increase in candidate supply for shortage roles.”
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