ALBAWABA – Employers in the United Kingdom (UK) reduced the number of new permanent staff hired through recruitment agencies, contributing to a drop in UK hiring by the fastest pace since mid-2020, as indicated in a joint KPMG and REC report released Monday.
The drop in UK hiring brought employment to lower levels than right before the COVID-19 pandemic, news agencies reported.
According to the Morning Star, UK firms are hesitant to recruit new staff because of concerns over the economic outlook, the study suggested.
The Recruitment & Employment Confederation reported a fall in permanent staff hiring, blaming a weaker economic climate and reduced market confidence.
The survey of 400 recruitment agencies found permanent staff appointments have fallen at the steepest pace for three years.
The gauge issued by Recruitment and Employment Confederation and KPMG International showed a drop in UK hiring to 42.4, which is the lowest since the 34.3 scored in June 2020, Reuters reported.
Neil Carberry, chief executive of REC, said the jobs market remained "fairly robust" despite the slowdown in permanent placements.
"To some extend this is normalisation as the post-pandemic boom abates, but it is also driven by uncertainty," he told the Canada-based news agency.
On the other hand, while starting pay for new permanent staff rose sharply by pre-pandemic standards, the rate of wage growth was also the lowest since April 2021, REC said.
Claire Warnes, partner of skills and productivity at KPMG UK, said competition for skilled workers and cost of living pressures were keeping starting salaries high.
Monday's survey chimed with other indicators showing the labour market is loosening, which bodes well for counter-inflation efforts by the Bank of England.
The central bank of England raised interest rates for the 14th meeting in a row to 5.25 percent last week and has been concerned about high wage growth.
Official data showed unemployment rose to 4 percent in the three months to May, a 16-month high, although annual wage growth remained at a record high of 7.3 percent in cash terms, as reported by Reuters.
Meanwhile, separate figures from accountants BDO showed rising interest rates, tough trading conditions and weak demand hit hiring intentions and business confidence across services and manufacturing sectors, Reuters reported.
BDO's hiring index fell for the first time in six months in July and its optimism gauge dropped for the first time in four months.
