HIRING ACTIVITY REMAINS MUTED IN MAY
- Modest decline in permanent staff placements
- Temp billings growth at 73-month low
- Demand for staff rises at historically subdued pace
The latest KPMG and REC, UK Report on Jobs, signalled that hiring trends remained subdued across the UK amid ongoing Brexit-related uncertainty. Permanent staff appointments fell at a slightly quicker pace than in April, while temp billings expanded at the slowest rate for over six years. At the same time, subdued confidence impacted on both the demand and supply of labour, with vacancy growth staying close to a multi-year low and staff availability declining further.
The report, which is compiled by IHS Markit from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies, indicated that permanent placements declined for the fourth time in the past five months during May. At the same time, billings received from the employment of short-term workers rose only marginally.
Permanent placements fall again in May
The number of people placed into permanent job roles fell for the fourth time in the past five months in May, and at a quicker pace than in April. At the same time, temp billings expanded only marginally, with growth hitting a 73-month low. There were many reports that hiring activity was dampened by uncertainty, but also mentions that demand for staff had weakened compared to earlier in the year.
Vacancy growth holds close to multi-year low
Recruitment agencies signalled a slightly stronger rise in overall vacancies during May, but growth remained close to April's 80-month low. Although both permanent and temporary job openings rose solidly, rates of increase remained notably weaker than their historical averages.
Uncertainty weighs on candidate supply
Ongoing Brexit-related uncertainty and generally tight labour market conditions were cited as key factors weighing on candidate availability during May. Furthermore, both permanent and temporary staff supply declined at faster rates than in April.
Starting salary inflation softens to 25-month low
Although salaries awarded to permanent starters continued to grow sharply in May, the rate of inflation was the least marked for just over two years. In contrast, temp wages increased at the quickest pace for six months. Panellists commonly stated that competition for scarce workers continued to place upward pressure on pay.
Regional and Sector Variations
Three of the four monitored English regions registered lower permanent staff appointments, with the Midlands seeing the quickest rate of decline. The North bucked the overall trend and saw a marked increase in permanent placements. Temp billings expanded in the South of England and in London during May. However, a further decline was seen in the Midlands while the North of England registered the first reduction since January.
Vacancy growth continued to be largely driven by the private sector, according to the latest data. Sharp increases in demand were seen for both permanent and temporary workers in the private sector during May. 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.
Nursing/Medical/Care saw the sharpest increase in temporary staff demand during May. A marked expansion in vacancies was also seen for Hotels & Catering. In contrast, demand for temp workers fell in Construction, Retail and Executive/Professional.
Commenting on the latest survey results, Neil Carberry, Recruitment & Employment Confederation chief executive, said:
“The jobs market is still creating opportunities for those looking for work. With vacancies rising and starting salaries going up sharply, it is worth people talking to recruiters about that next step in their career. Sectors like IT, engineering and healthcare are hiring strongly, while the North of England showed the best performance in terms of regions.
“Overall, though, the survey again shows what uncertainty does to hiring plans. Total permanent placements fell again this month while temporary billings grew only marginally. Recruiters are reporting that demand for staff is slowing and their clients are reducing business activity on average. Worryingly, these trends are most pronounced in key sectors like retail and construction.”
James Stewart, Vice Chair at KPMG, said:
“Brexit uncertainty continues to dampen the jobs market as companies kept their recruitment decisions on hold in May. Permanent staff appointments fell at a slightly faster pace than in April, while subdued confidence ensured that growth in temporary billings hit a six-year low.
“Of increasing concern is that uncertainty is feeding through to weaker growth in job vacancies, while the supply of candidates fell sharply as people are becoming more risk averse with regards to switching roles. Relatively muted trends for permanent staff vacancies were seen across the board, with retail, construction and executive/professional hit particularly badly.
“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 a new leader is in place and have more insight on the future direction of Brexit.”
IR35 - RISK TO CLIENT/BUSINESS
Article from Alexander Wilson LL.B. (Hons.) (Dunelm.), CTAIR35 barrister and CTA - Helping all corporations safely retain independent contractors with strong legal advice"Inside IR35" is NOT ...
HMRC INTERNAL MANUAL EMPLOYMENT STATUS MANUAL
HMRC internal manual Employment Status ManualPublished: 7 March 2016Updated: 10 February 2020 see all updatesAgency and temporary workers: the agency contract and the requirement for personal ser ...
IR35 POLL RESULT – CONTRACTORS WILL DUMP CLIENTS ISSUING PSC BLANKET BANS
IR35 Poll ResultThe ITContractor.com IR35 poll result shows that a vast majority of UK contractors plan to dump their clients if the client issues a blanket ban on contractors who use personal service ...
HMRC PENALISED DIRECTOR INSTEAD OF COMPANY
The first tier tribunal overturned the late filing penalties of a sole director for three reasons: the wrong taxpayer was named, HMRC misapplied the law, and she had a reasonable excuse.Angela Salazar ...
IR35 REVIEW: APSCO RESPONDS
Following news that the Government has launched an eleventh-hour review of changes to off-payroll working rules in a move ‘to address any concerns from businesses and affected individuals ...
IR35 – LET'S HOLD POLITICIANS TO ACCOUNT
Delaying changes to IR35 in the private sector is a key message in the REC’s manifesto ‘Making Great Work Happen’. In our discussions with politicians we have consistently campaigned for a delay ...