COVID-19 Pandemic Weighs Heavily on Recruitment - April's Report

Hiring freezes amid COVID-19 pandemic leads to substantial contraction of recruitment activity

Key points from the survey:

  • Record falls in permanent placements and temp billings
  • Demand for staff plummets and starting pay declines
  • Staff availability rises at quickest rate since November 2009 amid reports of redundancies

The main findings for April are:

Unprecedented fall in recruitment activity

Recruitment consultancies across the UK signalled a severe drop in overall hiring activity at the start of the second quarter as the COVID-19 pandemic led companies to put hiring plans on hold. As a result, both permanent placements and temp billings fell at rates far exceeding those seen even at the height of the global financial crisis.

Staff vacancies fall at sharpest rate on record

The pandemic also weighed on demand for staff as uncertainty over the outlook, including the longevity of any measures to contain the virus, led clients to reassess their staffing needs. Vacancies for both permanent and temporary workers fell at the sharpest rates ever seen since the survey began in October 1997.

Renewed fall in pay as demand for staff weakens

After rising at notably slower rates in March, starting salaries and temp wages both fell during April. Permanent starting salaries declined at the quickest rate since March 2009, while pay awarded to short-term staff dropped to the greatest extent since July 2009.

Labour supply increases for first time in seven years

The availability of candidates rose for the first time since April 2013, with the rate of expansion the steepest since November 2009. Recruiters widely commented that redundancies had led to marked increases in the supply of both permanent and temporary staff.

Neil Carberry, Chief Executive of the Recruitment & Employment Confederation, said:

“These numbers set records in all the wrong ways – but they are not unexpected, given the lockdown and the hit the economy is taking. While fighting the virus must remain our priority, the strain the lockdown is placing the economy under cannot be sustained indefinitely without very significant and long-lasting effects on unemployment and job creation.” “The good news is that the capacity for our economy to recover quickly is definitely there – but we won’t get back to strong growth instantly when the lockdown eases. Government needs to work with businesses to ensure that the support they have offered tapers out as the economy returns to normal, rather than leaving firms facing a cliff-edge and having to cut costs quickly through things like higher redundancies. This approach will also allow firms to invest in the future – creating new jobs to drive the economy and help the UK bounce back.”

Commenting on the latest survey results, James Stewart, Vice Chair at KPMG, said:

The COVID-19 pandemic continues to wreak havoc on the UK jobs market with a record drop in vacancies and recruitment plans frozen. “The uncertainty over the outlook is weighing heavily on the nation – we estimate that as many as 13 million jobs are highly affected by the lockdown, representing just over a third of all jobs in the UK. “It’s an unprecedented situation for UK business and resilience, then recovery, is key to navigating through the crisis. All eyes will also be on the Government’s forthcoming announcement on easing current restrictions so confidence in the jobs market can start to rebuild.”

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.