The UK’s job market continued to show signs of softening in August, with a steep decline in permanent staff placements and a marginal drop in temporary billings, according to the latest KPMG and REC, UK Report on Jobs.
Introduction
The survey of around 400 recruitment consultancies found that permanent placements fell at the sharpest rate since March, as employers cited reduced demand for new hires. Temporary billings also declined, though only marginally and at a similar pace to July.
- Permanent placements index fell to 47.5 in August, down from 48.7 in July
- Temporary billings index edged down to 49.8 from 49.9 the previous month
- Both figures signal contraction, with 50.0 the no-change mark
Slower Salary Growth as Candidate Availability Rises
Permanent salary growth also eased in August, rising at the weakest pace since March and well below the survey’s historical average. Temporary pay increased only slightly, reaching its slowest rate of expansion in three-and-a-half years.
“Firms holding back from hiring led to a sharp contraction in the number of people placed into permanent roles in August amid continued decline in demand, extending the downturn in the UK’s labour market,”
said Jon Holt, Chief Executive and Senior Partner of KPMG in the UK.
The moderation in pay growth came as candidate availability continued to climb, with both permanent and temporary staff seeing stronger increases compared to July.
Regional and Sectoral Divergence
The survey found regional variations, with the steepest fall in permanent placements seen in the South of England, while the North recorded little change. Temporary billings grew in the Midlands and North but declined in London and the South.
Across sectors, permanent vacancies fell the most for IT & Computing, but rose fastest for Nursing & Medical Care. Temporary roles declined the most for Executive & Professional, but expanded fastest for Blue Collar jobs.
Neil Carberry, REC Chief Executive said,
“It’s clear that there is underlying momentum in our jobs market, with temp hiring and private sector vacancies essentially flat. Some regions are seeing stronger performance too – notably the North of England.”
Cautious Hiring Amid Economic Uncertainty
Employers are reported to be taking a cautious approach to hiring, waiting for clearer signs of sustained demand before committing to new staff.
“The new government said growth was its main priority – but it needs to deliver now. A vision for a positive, prosperous Britain has to accompany the fiscal realism that is being served up right now. That is the test for the Chancellor and Prime Minister this autumn,” Carberry added.
For the latest updates on the UK job market, visit the KPMG Newsroom.
