December 2019 - UK Employment Report - Business Confidence Improves
Business Confidence Improves and Recruitment Rises at the End of 2019
Key points from the survey:
- Permanent placements rise for the first time in a year
- Vacancy growth remains near decade low
- Staff availability continues to fall sharply
The main findings for December are:
Renewed rise in permanent placements
December data signalled the first rise in permanent staff appointments for a year, though growth was only modest. The upturn was linked to higher business activity, the commencement of previously delayed hiring plans and the upcoming IR35 legislation changes. Concurrently, temp billings also rose modestly at the end of the year.
Vacancies continue to expand at subdued pace
Although growth of demand for staff strengthened slightly from November, the rate of expansion remained close to a decade-low and was modest overall. While permanent vacancies rose at the quickest pace for three months, growth of demand for temp workers softened since November.
Overall candidate availability falls markedly
The number of people available for new roles continued to decline sharply in December, despite the rate of deterioration softening since November. Recruiters often blamed lower candidate availability to lingering uncertainty and skill shortages. Permanent staff supply contracted at a quicker pace than that seen for short-term workers.
Pay pressures pick up slightly
Starting pay rose further for both permanent and temporary staff at the end of the year, with rates of growth picking up from November's recent lows. Though sharp overall, the increases in starting salaries and temp wages remained among the softest seen over the past three years, however.
Neil Carberry, Chief Executive of the Recruitment & Employment Confederation, said: “After the uncertainty of 2019, there are some signs of a clearer outlook for hiring in today’s survey. With a new government in place and the path ahead looking more predictable, some businesses have decided that they have waited long enough. The first increase in permanent placements for a year should give encouragement to both recruiters and employers – let’s hope this is a sign of positive things to come. “Feedback from recruiters shows that the upcoming IR35 changes are affecting both placements and the availability of flexible workers. This is a delicate period for the jobs market and is the worst time to push through sweeping changes to the way we tax contractors. It is right that government engages further with business on the changes, but they should also delay implementation until next year to allow time for a full, independent review and effective regulation of the umbrella sector. As it stands, the government risks damaging ethical businesses and encouraging non-compliance.”
Commenting on the latest survey results, James Stewart, Vice Chair at KPMG, said:
“It would appear that following the clarity of the election outcome, the jobs market finally began to show signs of life with permanent placements rising for the first time in a year. “However, growth was modest and coming off a historically low base, so UK business will be hoping for quick government action to get the UK back on the path to growth including an investment in upskilling the workforce. Lingering uncertainty around the Brexit deal to be secured will continue to weigh on employers’ decision making around hiring and investment over the coming months, as well as job-seekers desires to seek new opportunities.”
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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