KPMG and REC, UK Report on Jobs - March 2023
Firms' hesitancy to hire weighs on permanent staff recruitment in February.
Firms' hesitancy to hire weighs on permanent staff recruitment in February.
Key findings
Further fall in permanent placements, but temp billings rise
Vacancy growth improves for second month running
Softest reduction in candidate supply for nearly two years
Data collected February 10-22
Summary
Data from the latest KPMG and REC, UK Report on Jobs survey, compiled by S&P Global, showed that recruitment activity remained dampened by lingering economic uncertainty and subsequent hesitancy around hiring. Notably, permanent placements fell for the fifth straight month, while temp billings growth was mild overall.
Candidate shortages also contributed to the slowdown in hiring activity, though the latest drop in labour supply was the softest seen for nearly two years. Vacancies data showed a relative improvement in growth of demand for staff, however, helped by a quicker rise in permanent vacancies. Pay pressures remained sharp overall, driven by the rising cost of living and competition for scarce candidates.
The report is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.
February sees sustained fall in permanent placements
Permanent staff appointments across the UK fell for the fifth straight month in February, and at a slightly quicker pace than that seen in January. Recruiters often mentioned that clients adopted a more cautious approach to staff hires due to ongoing economic uncertainty. At the same time, billings for temporary workers continued to expand, albeit modestly.
Connect with us
- Find office locations kpmg.findOfficeLocations
- kpmg.emailUs
- Social media @ KPMG kpmg.socialMedia
Save, Curate and Share
Save what resonates, curate a library of information, and share content with your network of contacts.
Overall vacancy growth improves to four-month high
The latest survey indicated that overall vacancies continued to increase during February, with the rate of growth the best recorded for four months. Nevertheless, the upturn remained softer than that seen on average since the survey's inception over 25 years ago. Underlying data signalled that demand for permanent workers expanded at a quicker pace, while temp vacancy growth softened slightly.
Softest fall in candidate supply since March 2021
Recruitment consultancies signalled that the current downturn in candidate availability continued to ease midway through the first quarter. Overall staff supply fell at a mild rate that was the slowest seen for nearly two years, which was underpinned by softer falls in both permanent and temp candidate numbers. Panel members often commented that workers were reluctant to seek out new roles in the current economic climate, while ongoing skill shortages also weighed on staff availability. However, some recruiters noted that the supply of workers had improved due to recent redundancies.
Rates of starting pay continue to rise sharply
The rising cost of living and difficulties attracting and securing suitably skilled staff drove further increases in starting pay for both permanent and temporary roles in February. Permanent starters' salaries continued to rise at a quicker pace than that seen for temp pay, though in both instances the rate of growth was the second-softest for nearly two years.
Regional and Sector Variations
Three of the four monitored English regions recorded lower permanent placements, led by London. The North of England bucked the overall trend and saw a modest upturn.
The North of England saw the steepest increase in temp billings during February. The only monitored English area to report a fall was the Midlands.
Demand for staff continued to expand across both the private and public sectors midway through the first quarter. The quickest increase in vacancies was signalled for temporary staff in the public sector, closely followed by permanent workers in the private sector. The softest upturn in vacancies was recorded for temporary roles in the private sector.
Demand for permanent workers increased across all ten monitored job categories during February. Nursing/Medical/Care topped the rankings once again, while Secretarial/Clerical saw the softest expansion in vacancies.
February survey data indicated that demand for short-term staff rose quickest for Nursing/Medical/Care roles, followed closely by Hotel & Catering. Retail was the only employment area to see a fall in demand for temporary workers.
Comments
Commenting on the latest survey results, Claire Warnes, Partner, Skills and Productivity at KPMG UK, said:
"The current economic outlook continues to impact hiring activity as employers keep playing the short game by focusing on temporary hires, while permanent appointments fall for the fifth month in a row.
"Despite the rate of vacancy growth picking up to the best recorded in four months, candidate shortages remain, with recruiters citing hesitancy to move roles and longstanding, systemic skills shortages. Nursing, care and medical topped the rankings once again with highest demand for workers - both temporary and permanent.
"These factors combined continue to play into pay inflation as employers try to compete with the rising cost of living.
"What the economy needs now more than ever is a skilled workforce."
Kate Shoesmith, REC Deputy Chief Executive, said:
“This is further proof of ongoing demand in the UK jobs market, coming on the back of our most recent Labour Market Tracker report which showed new job adverts at a 14-month high in February.”
Commenting on today’s report, Kate Shoesmith continued:
“As hirers work out what variable economic forecasts might mean for their business and staff, it makes sense that we continue to see temp billings hold up so well. Temporary staffing ensures firms can continue to provide goods and services, and people can grow their careers - even when the economic outlook is unclear. Demand for staff continued to expand across both the private and public sectors. The rising cost of living, plus difficulties attracting and securing suitably skilled staff are also driving increases in starting pay. It will be particularly important to watch for any early trends coming from this data on regional disparities in supply and demand in the labour market.
“What this latest Report on Jobs shows is serious labour and skills shortages are not behind us. The economy stands to lose up to £39 billion in GDP every year from 2024 unless business and government act now. Many businesses are doing what they can but the Spring Budget is the ideal opportunity to find a way forward together. The Chancellor must put people issues first, with innovative and refreshed policies on skills and tackling economic inactivity, and from immigration to childcare.”
Contact:
KPMG
Rory Brown
Senior Manager
M: +44 (0) 751 0374 794
REC
Hamant Verma
Communications Manager
T: +44 (0)20 7009 2129
S&P Global
Annabel Fiddes
Economics Associate Director
S&P Global Market Intelligence
T: +44 (0)1491 461 010
Sabrina Mayeen
Corporate Communications
S&P Global Market Intelligence
T: +44 (0) 7967 447030
Methodology
The KPMG and REC, UK Report on Jobs is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.
Survey responses are collected in the second half of each month and indicate the direction of change compared to the previous month. A diffusion index is calculated for each survey variable. The index is the sum of the percentage of ‘higher’ responses and half the percentage of ‘unchanged’ responses. The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease. The indices are then seasonally adjusted.
Underlying survey data are not revised after publication, but seasonal adjustment factors may be revised from time to time as appropriate which will affect the seasonally adjusted data series.
For further information on the survey methodology, please contact economics@hismarkit.com.
Full reports and historical data from the KPMG and REC, UK Report on Jobs are available by subscription. Please contact economics@hismarkit.com.
About KPMG
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 15,300 partners and staff. The UK firm recorded a revenue of £2.43 billion in the year ended 30 September 2021.
KPMG is a global organization of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 145 countries and territories with more than 236,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.
About REC
The REC is the voice of the recruitment industry, speaking up for great recruiters. We drive standards and empower recruitment businesses to build better futures for their candidates and themselves. We are champions of an industry which is fundamental to the strength of the UK economy. Find out more about the Recruitment & Employment Confederation at www.rec.uk.com.
About S&P Global
S&P Global (NYSE: SPGI) S&P Global provides essential intelligence. We enable governments, businesses and individuals with the right data, expertise and connected technology so that they can make decisions with conviction. From helping our customers assess new investments to guiding them through ESG and energy transition across supply chains, we unlock new opportunities, solve challenges and accelerate progress for the world.
We are widely sought after by many of the world’s leading organizations to provide credit ratings, benchmarks, analytics and workflow solutions in the global capital, commodity and automotive markets. With every one of our offerings, we help the world’s leading organizations plan for tomorrow, today. www.spglobal.com.
Disclaimer
The intellectual property rights to the data provided herein are owned by or licensed to S&P Global and/or its affiliates. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without S&P Global’s prior consent. S&P Global shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall S&P Global be liable for any special, incidental, or consequential damages, arising out of the use of the data.
This Content was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global. Reproduction of any information, data or material, including ratings (“Content”) in any form is prohibited except with the prior written permission of the relevant party. Such party, its affiliates and suppliers (“Content Providers”) do not guarantee the accuracy, adequacy, completeness, timeliness or availability of any Content and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such Content. In no event shall Content Providers be liable for any damages, costs, expenses, legal fees, or losses (including lost income or lost profit and opportunity costs) in connection with any use of the Content.