Newly released statistics show that businesses continue to delay hiring as the confidence in the economy is still low.
According to the KPMG/Recruitment and Employment Confederation survey on jobs for January 2025, the decline in permanent hiring has extended the current contraction period to 28 months. The pace of decline was largely unchanged despite a slight improvement over December’s 16 month record.
A decline in demand for temporary workers has also resulted in a notable drop in temporary billings. This is the largest fall in over four years. This contraction has accelerated in pace since the end 2024, highlighting the uncertainty of the business climate.
Although the salary growth of permanent staff slowed in January, this was still relatively slow when compared to inflation rates which have been persistent since March 2021.
The increased availability of employees pushed down the pay growth, even though some companies continued to offer higher salaries as a way to attract high-quality candidates. The growth of temporary pay rates also slowed, and inflation reached its lowest point in four months.
The demand for personnel continued to fall throughout January. The number of vacancies dropped at the fastest rate since August 2020. The rate of decline for permanent job vacancies increased for a fifth consecutive month and reached a high not seen in almost four-and-a-half years. The demand for temporary staff also declined, the biggest drop since June 2020.
The hiring rate is likely to remain the same for the foreseeable future, and it is unlikely we will see significant improvements in survey data.
“Muted and staff availability continues on the rise” – Jon Holt KPMG
Jon Holt, UK senior partner and group chief executive at KPMG said: “Businesses are continuing to delay on
Recruitment leading to both permanent and temporary positions fell again sharply in January.
While firms still want to pay top talent, the availability of staff has weighed down on wage growth. This cooling may
The Bank of England’s recent decision to reduce rates was welcomed.
The hiring rate is likely to remain the same for the foreseeable future, and it is unlikely we will see significant improvements in survey data.
Staff availability is on the rise. Business leaders are prepared for gradual rate reductions and growth signals.
“A greater level of confidence in planning and investing could begin to manifest.”
The availability of both permanent and temp staff increased as redundancies rose across industries because of the difficult market conditions. The rate of growth for staff availability has slowed since December and reached its lowest level in almost a year.
The number of permanent staff vacancies fell across all categories. Executive and professional positions saw the largest drop, followed by secretarial, clerical and other administrative roles. The trend of permanent staff availability has continued to increase, but the rate has slowed since December.
The Midlands experienced the largest increase in the availability of permanent staff, while North and South England saw slower growth. In January, there was a slight rise in the starting salaries for permanent employees. This trend has been going on since March 2021. The rate of inflation in salaries remained modest due to the market conditions and availability of candidates.
The move last week on interest rates was timely to boost confidence.” – Neil Carberry REC
Tempo pay rates have also increased slightly in the fourth month consecutive growth. The increase was small, as the limited market demand and availability of candidates kept inflation at bay. The South of England experienced a decline in temporary pay rates while the Midlands saw an accelerated growth.
Neil Carberry said that the gloomy autumn of 2024 still affected business decisions. He said that the interest rate cut last week was a timely way to boost confidence. It will also be helpful that the government has given growth a more prominent place in its thinking, since the speech of last month by the chancellor. It takes time and real action to build confidence in business. Autumn of fiscal doom, difficulties navigating upcoming significant tax increases and little progress
All of these things are putting a brake on progress.”
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