Brexit is days away - are employers in a wait and see mode?
Here are the finding for January's UK Employment Report - Permanent staff appointments decline at start of 2019 amid uncertain outlook
Key findings for January are:-
- Permanent placements fall for first time in two-and-a-half-years
- Vacancy growth edges down to 27-month low
- Sharper fall in candidate availability leads to further increases in starting pay
Renewed fall in permanent placements...
Recruitment consultants registered the first drop in permanent staff appointments for two-and-a-half years in January amid concerns over Brexit and a further deterioration in candidate availability. Temp billings meanwhile rose at the joint-slowest pace in the current 69-month sequence of growth.
...as staff vacancies expand at softer pace
Although demand for staff remained strong at the start of 2019, overall vacancies increased at the slowest pace for 27 months. Notably, softer increases in demand were signalled for both permanent and temporary workers in January.
Candidate supply falls at quickest pace for 20 months
The number of people available to take up new roles continued to decline sharply in January. Shrinking labour supply was often linked to high employment in the UK, as well as hesitancy among potential candidates to move roles amid Brexit-related uncertainty.
Pay pressures remain historically sharp
With vacancies rising and labour supply falling further, starting pay continued to increase sharply in January. Notably, permanent starters' salaries and temp wages both rose at historically strong rates.
Neil Carberry, Recruitment & Employment Confederation chief executive, said:
“This is the first month since July 2016 where permanent placement numbers have dropped, with weaker – but still positive – performance for temporary roles, and the lowest rate of vacancy growth for over two years. But we should be careful not to overreact – employment rates are high, and the performance of our labour market overall is still strong. That said, the survey results are a sharp reminder to politicians in Westminster and in Brussels of the need to provide businesses with clarity about the path ahead, so they can invest with confidence.”
“With Brexit just days away now, it’s definitely a nervous time for recruiters. January marked the first fall in permanent staff appointments since the referendum and we’ve seen a sharp decline in the number of candidates entering the jobs market. This is pushing up starting salaries at historically strong rates. “Both employers and employees are in ‘wait and see mode’ now and there is little reason to believe the brakes will come off the jobs market before we find out what sort of Brexit the UK is about to experience. “The majority of sectors across the UK economy are now more cautious, and hiring more slowly than they were 12 months ago. Indeed, the retail sector is actually shedding permanent staff. “Nationally the number of permanent staff appointments has fallen considerably in the North region, Midlands region and London. The exception is the Southern region where the number of permanent staff appointments continues to grow, albeit more slowly.”
The Report on Jobs is unique in providing the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies and employers to provide the first indication each month of labour market trends.
Mosaic Search and Selection Ltd contribute market data to this Report on Jobs which is a monthly publication produced by Markit and sponsored by the Recruitment and Employment Confederation and KPMG LLP. The full copy of this report is available from Markit.
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