Review of the UK Jobs Market – July
Welcome to our Review of the UK Jobs Market for July 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:
- Accelerated drop in permanent staff appointments
- Sharper rise in candidate availability
- Salary inflation edges lower, but remains marked overall
- Overall vacancies expand at slowest rate in 29 months
Fastest drop in permanent placements since June 2020
In July, there was a steeper fall in the number of people placed into permanent job roles across the UK. Notably, the rate of decline was the sharpest seen for just over 3 years. There were frequent reports that a weaker economic outlook and a drop in client confidence had led to greater hesitancy to commit to new hires. An insufficient supply of workers with specific skills is also to blame.
Temp billings increase only fractionally
July saw a further increase of temporary workers, thereby extending the current period of growth to three years. That said, the rate of expansion was the weakest seen in nine months and only fractional. More flexible staffing arrangements were often preferred by companies amid the subdued economic outlook. Limited temporary candidate numbers also weighed on growth.
Overall vacancies expand modestly
July signalled historically subdues upturns for both permanent and temporary staff across the UK. Permanent roles increased at the softest pace in 29 months and mildly overall. Concurrently, growth of demand for short-term staff also moderated, though remained solid.
Data from the ONS pointed to a further reduction in total vacancies across the UK. The number of available roles fell 85,000 to 1,034,000 in the 3 months to June 2023. Nevertheless, the figure remained high in the context of historical data. Notably. the number of roles available were +25.2% above that recorded just prior to the pandemic.
Accelerated upturn in overall candidate availability
The supply of permanent labour has now risen in each of the past five months, with the latest expansion the steepest seen in just over two-and-a-half-years. Company redundancies and restructuring plans pushed up candidate numbers, alongside a general slowdown in hiring.
The upturn in temporary candidate numbers also gathered pace in July. Though not as rapid as that seen for permanent labour supply, the latest increase in short-term staff availability was also the most pronounced since December 2020. Reduced recruitment activity and company layoffs has increased the pool of available workers.
Softest increase in starting salaries since April 2021
Average starting salaries for people placed in permanent jobs increased further at the start of the third quarter. The rate of pay growth edged down for the third month in a row and was the softest recorded since April 2021. Nevertheless, the increase remained sharp overall. The general increase in the cost of living and competition for skilled candidates are still driving salaries higher.
Temp wage inflation dips to 29-month low
Hourly rates of pay for staff in temporary /contract employment continued to rise in July. Though solid overall, the rate of wage inflation was the slowest seen over the current 29-month sequence of rising pay. Where higher wages were reported, this was attributed to shortages of skilled candidates and efforts to attract applicants.
Source: KPMG and REC UK Report on Jobs 7th August 2023
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