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Hiring activity picks up in August – REC/KPMG

Hiring activity picks up in August – REC/KPMG

The latest REC/KPMG Jobs Report for August shows a renewed increase in hiring activity following the relaxation of public health measures and the reopening of the UK economy after the coronavirus disease 2019 (COVID-19) outbreak. Permanent placements rose only marginally overall, but temp billings expanded at the steepest rate since December 2018.

UK recruitment consultancies signalled the first increase in permanent staff appointments for six months in August. Though only slight, the upturn was a marked improvement on the severe drops seen in prior months when the COVID-19 outbreak led many firms to cancel or delay staff hiring.

Regional data highlighted divergent trends, with permanent staff appointments rising in the South of England and the Midlands but declining in the North of England and London.

Latest data signalled that billings received from the employment of temporary workers increased during August, thereby ending a seven-month period of decline. Furthermore, the rate of growth was the sharpest recorded since December 2018.

The overall availability of workers continued to expand at a historically sharp rate in August. Notably, the rate of growth was the second sharpest on record (after December 2008). Recruiters frequently mentioned that company lay-offs had raised candidate numbers, with both permanent and temporary worker supply rising markedly.

Recruiters indicated that increased worker availability and muted demand for staff continued to weigh on starting pay in August. However, both starting salaries and temporary wages declined at weaker rates compared with those seen in the previous four months.

Overall vacancies fell for the sixth month running in August, with the rate of decrease quickening slightly since July. Underlying data highlighted divergent trends, with permanent staff demand deteriorating sharply, while short-term vacancies stabilised. The Total Vacancies Index slipped from 43.4 in July to 42.8 in August, to signal a further drop in overall demand for staff. The rate of reduction was sharp overall but remained much weaker than those recorded throughout the second quarter at the peak of the pandemic.

Commenting on the latest survey results, James Stewart, Vice Chair at KPMG, said:

“It’s positive to see an uptick in hiring activity, particularly for temporary staff, which could mark a turning point with businesses appearing more willing and able to hire as more parts of the UK economy reopen.

But with total candidate availability rising at a near-record pace, strong and sustained rises are needed to move the UK jobs market back to levels seen pre-COVID – and with concerns around a possible second wave of infections, the winding down of the furlough scheme and a Brexit deal outcome, there are still many challenges ahead.

This paves the way for government to not only provide short-term support but also to offer jobseekers the means to retrain and upskill, helping the recovery in jobs and reviving the UK’s productivity growth.”