UK Recruitment Activity Weakens Amid Caution Over Economic Outlook, According to KPMG Report

Recruitment activity in the UK weakened in August due to concerns about the economic outlook, according to a report by KPMG. The report highlighted several key findings, including the steepest drop in permanent placements in over three years and a decline in temp billings for the first time since July 2020. Despite an increase in candidate supply, pay pressures remain high. The report also noted a slowdown in hiring, an increase in candidate availability, and a weakening in the growth of demand for permanent staff. However, competition for specific skills and a strong inflationary environment led to higher starting pay. The data was collected from August 10-24, 2023, as part of the KPMG and REC, UK Report on Jobs survey, compiled by S&P Global. The survey indicated reduced recruitment activity across the UK during August, with recruiters attributing the decline to a weaker economic climate and cautious hiring policies. The report highlighted a decline in permanent placements and temp billings, an expansion of candidate availability, and a weakening in the growth of demand for staff. Pay pressures remained high, with starting salaries and temp wages rising sharply. The report also highlighted regional and sector variations, with all English regions, except the Midlands, experiencing a decline in both permanent placements and temp billings. The private sector saw the strongest increase in demand for temporary staff, while the public sector saw only a modest increase in demand. Vacancies in the hospitality and catering sector grew the most, while demand for secretarial/clerical and retail staff declined. The report concluded by emphasizing the importance of addressing skills shortages through significant investment in the long-term prospects of the economy. Industry experts noted that the lack of confidence among employers and the ongoing economic outlook are keeping businesses cautious. However, some sectors, such as healthcare and IT, continue to experience high demand for both temporary and permanent staff.

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