The latest KPMG and REC UK Report on Jobs presents an updated snapshot of the UK labour market as of August 2024. While the job market has shown some resilience, it continues to face challenges due to fluctuating business confidence and economic uncertainties. The report provides insights into trends in permanent and temporary jobs, salary movements, candidate availability, and regional as well as sector-specific variations, enabling employers to make targets and informed recruitment decisions.
Before we jump into this summary, it’s worth pointing out that August is always a difficult month to draw significant conclusions from.
So, let’s take a look at the lay of the land.
The number of people going into new permanent jobs is down
Candidates starting new permanent roles continued on a downward trend, marking the 23rd consecutive month of decline. The pace of this contraction has increased since March, driven by lower demand from employers and reduced vacancies. This indicates a cautious approach by businesses towards hiring for permanent roles as they wait for more stable economic conditions. Despite the challenging environment, certain sectors such as engineering have shown more resilience, with continued demand for skilled professionals.
The North is faring well for temps
The number of temporary roles also showed a decline in August, although the drop was marginal compared to the previous month. The stability of temporary roles in regions like the North of England suggests a demand for flexibility among employers, who might be favouring temp roles over permanent hires due to economic uncertainties. The Midlands and North actually reported some growth in the number of temps being used, but the national average is still showing a decline. This highlights the variations across regions.
The number of vacancies is down
In real terms, the above two points are evident because the overall number of vacancies is continuing to contract. However, it’s important to distinguish between public and private sectors. The decline in public sector vacancies was more pronounced than in the private sector. Private sector temporary vacancies remained stable. Sectors like Engineering continue to have high vacancy numbers.
Salaries continue to rise, but pressure on employers is easing
Salaries and wages for both permanent and temporary positions increased in August but at a much slower rate compared to previous months. For permanent roles, the increase was the weakest since March, signalling a potential cooling in wage inflation. Temporary pay also saw the slowest growth in three-and-a-half years. However, in line with the higher demand, wages for temps in the North and the Midlands edged upwards. Overall, this suggests that while employers are still willing to offer competitive salaries to attract talent, the pressure is easing as candidate availability improves.
More choice in talent for employers
Candidate availability for both permanent and temporary positions continued to grow in August, extending an 18-month trend. This increase is largely attributed to redundancies and fewer vacancies, leading to a larger pool of available talent. The increased availability of candidates offers opportunities for employers to access a broader talent pool, and savvy businesses are taking advantage of this opportunity.
Overall, the report paints quite a complex picture of the UK job market, balancing signs of ongoing challenges with pockets of resilience and bounce-back. Employers and job seekers alike must navigate this evolving landscape with a strategic, adaptable approach.
As Neil Carberry, REC Chief Executive, aptly commented,
It’s clear that there is underlying momentum in our jobs market, with temp hiring and private sector vacancies essentially flat. Some regions are seeing stronger performance too – notably the North of England. Pay growth has returned to a more normal level, which should reassure the Bank that the positive signal of beginning to cut interest rates was the right call. Firms will welcome this.
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Recruitment Outlook Report – August 2024
