KEY POINTS FROM SURVEY
Notable slowdown in permanent placement growth
Vacancies expand at softest rate for over a year
Pay pressure eases only slightly as labour supply drops further
Permanent placement broadly stagnant in June
Temp billings rise strongly
Staff supply declines at quicker pace
PERMANENT PLACEMENT GROWTH WEAKENS TO 16-MONTH LOW IN JUNE
Commenting on the latest survey results, Claire Warnes, Partner and Head of Education, Skills and Productivity at KPMG UK, said:
“The apparent buoyancy of the jobs market overall continues to mask some increasingly concerning trends. Firstly, the fluctuations in demand for permanent and temporary workers in some sectors may be showing a sustained downward trend, as it becomes clear that current economic pressures are impacting employers’ confidence to grow. Secondly, the supply of candidates in all sectors continues to decline, with the rate of contraction accelerating to the quickest for three months in June. Added to that, competition for candidates pervades all sectors with employers offering financial incentives to retain talent, so increasing wage inflation. This latest data could be signalling that the UK jobs market may be more fragile than it seems.”
Commenting on the latest survey results, Warren Middlwton, office senior partner for KPMG in Leeds, said:
“Permanent placements stagnated in June across the North due to a lack of available candidates with the right skill sets. As the skills shortage continues to make an impact, competition for candidates pervades the North with employers offering financial incentives to retain talent, so increasing wage inflation. Employers need to ensure that these increased wage costs are sustainable in the long term to avoid creating problems for themselves further down the line.”
Neil Carberry, Recruitment & Employment Confederation chief executive, said:
“The labour market is still strong, with demand for new staff high. That said, today’s data show that we are likely to be past the peak of the post-pandemic hiring spree. That pace of growth was always going to be temporary – the big question now is the effect that inflation has on pay and consumer demand over the course of the rest of the year. Whether we will see the market settle at close to normal levels, or see a slowdown, is unpredictable at this point.
“Part of the reason for unpredictability in the market is a slower economy accompanied by severe labour and skills shortages. These are already proving a constraint on growth in many firms. The government should be thinking about how to ensure all its departments enable greater labour market participation and encourage business investment funds to help address this.
“It is important to note that plenty of hiring is happening in this tight market – there are candidates out there for firms who get it right. Skilled recruitment professionals are at the heart of this, making a difference to opportunity and growth for companies and workers.”
DEMAND FOR STAFF BY SECTOR
Adjusted for seasonal influences, the Permanent Placements Index signalled an increase in the number of people placed into permanent jobs across the UK for the sixteenth month running. Though solid, the rate of increase was the weakest seen over this period, however, as growth has slowed continuously since December 2021. Higher permanent staff appointments were frequently linked to stronger demand for workers and the filling of vacancies. However,
a combination of candidate shortages and slower decision-making at clients amid rising costs had constrained overall growth.
All four monitored English regions noted softer rises in permanent placements, with the North of England seeing the weakest upturn overall that was only fractional.
June survey data signalled steep increases in permanent staff demand across all ten monitored employment categories. Hotel & Catering saw the sharpest upturn in vacancies overall, followed by IT & Computing and Nursing/Medical/Care.
UK recruitment consultancies signalled a further rise in billings received from the employment of temp/contract staff in June, thereby stretching the current period of growth to 23 months. Though sharp and above the series average (55.2) the rate of expansion edged down to the lowest since February 2021. Anecdotal evidence often cited strong demand for short-term staff in the latest survey period amid rising business requirements at clients. At the same time, there were mentions that low candidate availability and a general increase in expenses faced by businesses had weighed on temp billings.
London saw the sharpest increase in billings at the end of the second quarter, while the softest expansion was registered in the Midlands.
Recruiters signalled higher temp vacancies in nine of the ten monitored job categories at the end of the second quarter. Hotel & Catering topped the rankings, while Retail was the only sector to note reduced demand. That said, the rate of contraction was only modest.
Hotel & Catering
SKILLS IN SHORT SUPPLY
Key Permanent Staff Skills
Accountancy/Financial: Accountants, Auditors, Book-keepers, Credit Controllers, Estimators, Finance, Financial Planners, Para-planners, Payroll, Purchase Ledger and Taxation.
Blue Collar: Drivers, Factory, FLT, HGV, Industrials, Manufacturing, Security Guards and Warehouse.
Construction: Architectural Technicians, Cladders, Quantity Surveyors and Surveyors.
Engineering: Design Engineers, Electrical Engineers, Hardware Engineers, Mechanical Engineers, Radio- Frequency Engineers, Senior Electronic Engineers and Technicians.
Executive/ Professional: Compliance, HR, Legal, Marketing, Project Managers and Recruitment Consultants.
Hotel/Catering: Chefs and Hospitality.
IT/Computing: Analysts. CAD, Cloud Engineers, Data Engineers, Developers, Digital, IT, Media, Software, Software Engineers, Technical Sales and Technology.
Nursing/Medical /Care: Carers, Chemists, Health Care Assistants, Hearing Aid Dispensers, Nurses, Optometrists, Pharmacists and Social Workers.
Secretarial/ Clerical: Administration, Office Staff and Receptionists.
Other: Call Centre, Customer Service, Graduates, Languages, Life Sciences, Logistics, Quality Control, Sales, Skilled, Supply Chain, Teachers, Telemarketing and Telesales.
Key Temp Skills
Accountancy/Financial: Accountants, Auditors, Book Keepers, Credit Controllers, Finance, Payroll, Purchase Ledger and Taxation.
Blue Collar: Carpenters, Decorators, Drivers, Factory, FLT, HGV, Industrials, Manufacturing, Production, Rail, Security Guards, Site Managers, Warehouse and Welders.
Construction: Architectural Technicians, Bricklayers, Labourers and Quantity Surveyors.
Engineering: Design Engineers. Industrial Engineers, Mechanical Engineers and Radio-Frequency Engineers.
Executive/Professional: Legal and Project Managers.
Hotels/Catering: Catering, Chefs and Hospitality.
IT/Computing: Automation Testers. Developers, Digital, IT, Software Engineers and Technology.
Nursing/Medical/Care: Carers, Dentists, Health Care Assistants, Hearing Aid Dispensers, Nurses, Optometrists, Pharmacists and Social Workers.
Secretarial/Clerical: Administration, Office Staff, PA’S and Receptionists.
Other: Customer Service, Designers, Graduates, Languages, Logistics, Sales, Skilled, Teachers, Telemarketing, Telesales and Unskilled.
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