Uncertainty weighs on hiring and staff availability in February - UK Employment Report
Key findings for February are: -
- Availability of staff continues to worsen
- Permanent placements unchanged, but temp billings expand at quicker pace
- Vacancy growth at near two and a half year low
Candidate availability declines further
A high employment rate across the UK and hesitancy to seek out new roles amid an uncertain outlook, led to a further steep drop in overall staff supply in February. Despite easing since January, the deteriorations in both permanent and temporary worker availability remained historically sharp.
Permanent placements stagnate in February
After a marginal drop at the start of the year, permanent staff appointments were unchanged in February. The broadly stagnant trend for the year so far contrasts with steep increases through 2018, with some panellists indicating that uncertainty around Brexit and a lack of suitably skilled candidates impacted on hiring. At the same time, temp billings rose at a steeper rate, after increasing only slightly in January.
Vacancies expand at slowest rate for 29 months
Although demand for staff continued to rise markedly, the rate of vacancy growth edged down for the second month running to a near two-and-a-half-year low. Softer increases in demand were signalled for both permanent and temporary staff in February.
Pay growth eases but remains marked
Latest data pointed to a further sharp rise in starting salaries, with employers generally having to up pay offers to attract and secure candidates. That said, the latest increase was the softest seen for seven months. Temp wage inflation meanwhile eased to a 13-month low.
Neil Carberry, Recruitment & Employment Confederation chief executive, said:
“The resilience of employers and the British jobs market shines through in today’s Report on Jobs. While numbers are clearly weaker than we have seen over the past few years, the survey suggests businesses are ready to create jobs if the investment environment is right. Recruiters are playing a crucial role in helping their clients fill gaps. As we draw closer to Brexit day, uncertainty and concern has grown, putting the sustainability of positive jobs news at risk. Firms are looking for politicians to find a solution to the current deadlock that gives them the certainty they need to invest and create jobs."
Commenting on the latest survey results, James Stewart, Vice Chair at KPMG, said:
“Overall the labour market has been incredibly resilient over the last couple of years as employers have opted to hire more permanent and temporary staff rather than invest in long term productivity gains. However in 2019 Brexit uncertainty is having an opposite and chilling effect on the jobs market, with firms reassessing their level of risk. “With a decision on Brexit now imminent we’re seeing companies freeze or slow the pace of new hires, whilst at the same time the number of people looking to enter the jobs market has declined further. Vacancy growth is now back to the levels we saw around two and a half years ago. “With unemployment at its lowest level since 1975, widespread skills shortages are also cooling the jobs market with the most acute issues to be found in sectors such as IT, engineering, and nursing. This means candidates with the right skills are commanding ever higher premiums and pay growth is now at a 10-year high. This has seen pay outstripping living costs meaning people feel better off. “Once a political decision is made on Brexit we expect a wave of pent-up investment to be released in parallel with a renewed focus on cost reduction. This should result in another busy time for the jobs market later this year.”
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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