UK recruitment for permanent staff down amid weaker economic climate

UK firms are hesitant to recruit new staff because of concerns over the economic outlook, research suggests.

The Recruitment & Employment Confederation reported a fall in permanent staff appointments, blaming a weaker economic climate and reduced market confidence.

A survey of 400 recruitment agencies found permanent staff appointments fell at the steepest pace for three years.

There were frequent reports of redundancies and hiring freezes, while competition for skilled workers and the increased cost of living continued to place upward pressure on rates of starting pay during July, the REC found.

Chief Executive Neil Carberry said: ‘The jobs market overall remains fairly robust, with vacancies and pay still rising and unemployment low, but there is a sense in today’s report that the economy will need some growth soon to sustain this positive picture.

‘Permanent hiring has been slowing all year. To some extent this is normalisation as the post-pandemic boom abates, but it is also driven by uncertainty.

‘Hiring overall is still at a good level, and some sectors remain under pressure from significant labour shortages, including hospitality and construction.

‘But today’s report emphasises again that sustained positivity in our labour market rests on economic growth and investment in the UK.

‘A proper industrial strategy that tackles the big issues we face and which fully encompasses workforce thinking around skills, transport, access to work and immigration is long overdue.’

Claire Warnes of KPMG, which helped with the research, added: ‘The latest survey results reflect the current summer weather – damp, but with some possible bright skies on the horizon.

‘Recruiters told us that their clients aren’t yet confident enough in the economic outlook to commit to permanent hires, leading to the steepest pace of decline in placements since June 2020.’

source: PA

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