Produced by KPMG and the Recruitment and Employment Confederation and compiled by IHS Markit, the May report says hiring trends remain subdued across the UK amid Brexit-related uncertainty and tight labour market conditions.
The research drew from a survey of around 400 UK recruitment and employment consultancies, and revealed that the number of people placed into permanent job roles fell for the fourth time in five months – and at a quicker pace than in April.
The availability of candidates to fill permanent job roles declined in May, marking the sharpest rate of contraction since January and much quicker than average. All four English regions monitored (London, South, Midlands, North) registered marked reductions in permanent candidate supply, led by the South of England.
Meanwhile, the May survey data also pointed to a weaker increase in billings received from the employment of temporary/contract workers, with growth hitting a 73-month low. In the public sector, temp vacancies rose at a steeper pace, but demand for permanent staff fell for the third month in a row.
Demand for permanent staff remained strongest in IT & computing in May, closely followed by engineering. The only two monitored sectors to register lower permanent job vacancies were construction and retail. Demand for temp workers also fell in construction, as well as retail and executive/professional.
James Stewart, vice chair at KPMG, said it is concerning that uncertainty is beginning to feed through to weaker growth in job vacancies as well as the supply of candidates, which is falling sharply as people become too nervous to switch roles.
“We expect the labour market to remain in stalemate over the summer as the contest for a new prime minister kicks off. Companies are unlikely to make any dramatic investment decisions until they have more insight on the future direction of Brexit,” he added.
Neil Carberry, the REC’s chief executive, said that although the jobs market is still creating opportunities, and starting salaries are going up, uncertainty is definitely affecting hiring plans. “Recruiters are reporting that demand for staff is slowing and their clients are reducing business activity on average.”
Meanwhile, there was more positive news from Randstad’s latest financial services salary survey, which said London’s job market remains lucrative for accountants, bankers and other financial service professionals.
The 2019 survey said that while most permanent and temporary salaries have remained reasonably static, some areas are reporting an upsurge in salaries and day rates. These include compliance, where the average salary has risen from £98,900 to £110,100, and management reporting and analysis, where top-end salaries for senior A-players remained at the £120,000 mark.
Adam Thorpe, Randstad Financial Services operations director, said, “Despite the ongoing uncertainty over the country’s withdrawal from the EU, the City offers the highest salaries and bonuses in the market and will continue to be an attractive location for financial service workers in 2019. “
However he warned that, “looking to the future, if banks do move their operations to other European hubs, there’s no question that compensation packages are going to shrink.”