Review of the UK Jobs Market – May
Welcome to our Review of the UK Jobs Market for May 2023. Each month, we share market insight on the state of the UK jobs market.
You can either read our short blog, or see our infographic.
The main findings were:
- Permanent placements fall further, temp billings growth eases
- Strongest rise in candidate numbers since end of 2020
- Starting salary inflation slips to 25-month low
Permanent placements continue to fall markedly in May
Permanent placements across the UK declined again during May. A general slowdown in hiring activity and delayed devision-making amid ongoing economic uncertainty had impacted placements. There were also reports that a lack of suitable candidates and the additional Bank Holiday for the King’s Coronation had weighed on recruitment.
Temp billings growth cools to a seven-month low
May saw an increase in temp billings for the thirty-fourth month in a row. Companies often preferred the flexibility of short-term staff given the lingering uncertainty over the outlook. Also, firms had taken on temp workers due to difficulties sourcing suitable permanent staff. However, the rate of growth slowed to the weakest since last October and was marginal overall.
Softest increase in vacancies for five months
Softer increases in demand were recorded for both permanent and temporary staff midway through the second quarter. Permanent vacancies rose at a pace that, though solid, was the second-slowest since February 2021. Temp roles meanwhile expanded at the weakest rate for 33 months and only slightly.
The number of open roles stood at 1,083,000, down 55,000 from the preceding three-month period to mark the tenth consecutive decline. On a more positive note, vacancies remained comfortably above the number before COVID-19 pandemic.
Steepest rise in labour supply since December 2020
Permanent candidate supply increased for the third straight month in May. Furthermore, the rate of growth quickened notably on the month and was the sharpest since the end of 2020. This is mainly attributed to redundancies, which in turn were linked to lingering economic uncertainty and company restructuring efforts. Some workers are now more willing to look for new roles, particularly with higher pay.
After expanding only fractionally in April, the availability of temp staff rose solidly across the UK in May. Short-term labour supply has now increased in each of the past three months, with the latest upturn the steepest since February 2021.
Permanent pay growth slips to 25-month low in May
May signalled a rise in starting salaries for permanent staff for the twenty-seventh successive month. Though sharp, the rate was the softest seen for just over two years. The higher cost of living and efforts to attract suitably skilled staff were linked to the latest hike in starting salaries.
Temp wages continue to rise sharply
The UK saw a sustained rise in temp hourly wages during May. Mainly, this has been to reflect the higher cost of living.Though marked overall, the rate of inflation edged down from April and was among the softest seen over the aforementioned period.
Source: KPMG and REC UK Report on Jobs 8th June 2023
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