Hiring activity in the UK continued to decline in April, with permanent staff appointments falling for the 31st consecutive month, according to the latest UK Report on Jobs by KPMG and the Recruitment and Employment Confederation (REC).
Economic uncertainty, increased payroll costs and tighter budgets have contributed to weaker employer confidence and a reduction in hiring commitments.
The rate of decline in permanent appointments, while still sharp, was the softest since September 2023. Temporary billings also decreased, though at the slowest pace in four months. Recruiters cited employer hesitance to take on permanent hires amid an uncertain economic outlook and pressure on budgets.
Regionally, the steepest fall in permanent placements was seen in the South of England, while London experienced the mildest drop. Temp hiring followed a similar trend, showing ongoing caution in the market despite seasonal factors and national wage increases.
The number of candidates available for roles continued to rise sharply. April saw a substantial increase in candidate supply, driven largely by restructuring and redundancies. The growth in availability of permanent candidates was more pronounced than for temporary staff.
Demand For Staff Weakens Amid Market Uncertainty
The overall demand for staff remained in decline in April. The seasonally adjusted Total Vacancies Index dropped from 44.2 in March to 43.1 in April, indicating a further fall in vacancies for both permanent and temporary positions. This marks the 18th successive month of reduced demand.
Permanent and temporary vacancies both contracted at similar rates. The pace of decline was slightly quicker than in March but remained below the levels seen earlier in the year. The report suggests ongoing employer caution, with businesses holding back on recruitment decisions in response to global economic pressures and domestic cost increases.
Wage growth presented a mixed picture. Starting salaries for permanent staff rose again in April, matching the pace of growth seen in March, which had been the fastest in seven months. However, this increase remained below the long-term average. Temporary wage growth improved to the fastest rate in 11 months, largely attributed to the April increases in national minimum and living wage thresholds.
Employers Call For Clarity On Regulation And Payroll Costs
Commenting on the report, Jon Holt, Group Chief Executive and UK Senior Partner at KPMG, said the hiring slowdown reflected continued caution among employers. He pointed to ongoing global economic pressures and cost inflation as major contributing factors. “Starting salaries increased again in April, as a new national minimum wage took effect,” he said. “But the fact that the pace of growth continues to remain below the long-run average will support the Bank’s decision to decrease interest rates this month.”
Neil Carberry, Chief Executive of the REC, highlighted the strain on employers caused by rising costs in April. “Maintaining the gradual improvement in numbers we have seen over the past few months is on the good end of our expectations,” he said. “While we are yet to see real momentum build, hopes of an improving picture in the second half of the year should be buoyed by today’s data.”
Carberry also noted the importance of addressing employer concerns about upcoming employment legislation. “Businesses have welcomed positive discussions with Ministers on the Employment Rights Bill, but now it is time for real changes,” he said. He called for a clear timetable and practical reforms that reduce the administrative burden on firms, arguing that such steps could help improve hiring confidence.
