Review of the UK Jobs Market – December

Welcome to our Review of the UK Jobs Market for December 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:

• Slower falls in both permanent placements and temp hours
• Rates of pay growth pick up from November lows
• Candidate supply continues to rise sharply

Staff Appointments

There was a reduction in permanent staff appointments across the UK for the fifteenth straight month in December. While the rate of decline softened from November, it was nevertheless solid overall and stood in marked contrast. Softer demand for staff, fewer vacancies and hiring freezes due to lingering uncertainty around the outlook all contributed.

There was a decline for the second successive month in December. There were a number of reports of employers reducing their usage of short-term staff, often due to cost considerations and lower activity levels. The rate of contraction was modest, however, having eased since November.

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Vacancies

Demand for staff continues to fall slightly

Permanent staff vacancies across the UK fell for the fourth month running in December. That said, the rate of decline remained only slight. Demand for temporary workers meanwhile rose at the weakest pace in just over three years and only marginally.

Data from the ONS highlighted that total vacancies remained on a downwardtrend in the three months to November. At 949,000, the number of open roles has fallen continuously on a three-month rolling basis since June 2022, to hit the lowest level for nearly two-and-a-half years. Nevertheless, vacancies were 123,000 higher than just prior to the pandemic.

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Staff Availability

Overall candidate supply continues to expand sharply

Having expanded at the quickest rate for nearly three years in November, December signalled a softer rise in permanent candidate numbers in December. That said, growth remained sharp overall and among the quickest seen since 2009 when excluding the pandemic period. Redundancies were cited as the key driver of higher permanent staff supply. There were also reports that lower levels of hiring activity had increased the pool of available workers.

December saw an increase in the number of workers available for short-term roles for the tenth successive month. Company layoffs and fewer projects at clients were the main reasons.

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Pay Pressures

Having expanded at the quickest rate for nearly three years in November, December signalled a softer rise in permanent candidate numbers in December. That said, growth remained sharp overall and among the quickest seen since 2009 when excluding the pandemic period. Redundancies were cited as the key driver of higher permanent staff supply. There were also reports that lower levels of hiring activity had increased the pool of available workers.

Source: KPMG and REC UK Report on Jobs 7th January 2024