Decline in UK Hiring Eases as Job-Seekers Increase, Pay Growth Slows
A recent industry survey conducted by the Recruitment and Employment Confederation (REC) revealed that the decline in hiring by British employers has slightly eased in October. However, the survey also highlighted a slowdown in pay growth and an increase in the number of job-seekers due to rising redundancies.
Although the number of permanent job placements fell last month, it was by the smallest amount since June. On the other hand, businesses’ spending on temporary staff remained steady. REC Chief Executive Neil Carberry commented on the situation, stating, “In many ways, the labour market is marking time waiting for the brakes to be taken off growth by the Bank of England. While permanent hiring is now declining more softly, temporary hiring continues to pick up the slack.”
The Bank of England (BoE) recently decided to maintain its interest rate at a 15-year high of 5.25% and stated that it was too early to consider cuts. Inflation remains above the target at 6.7%, and it is anticipated to return to 2% only in late 2025.
Policymakers have expressed concern over the official measures of wage growth, which indicated that private-sector pay rose at an annual rate of 8.0% in the three months leading up to the end of August. This rate is more than double what it was before the COVID-19 pandemic. The significant pay growth has occurred despite rising unemployment and a sluggish economy. The BoE predicts zero growth in 2024, raising worries about a potential mismatch between job-seekers’ skills and employers’ requirements.
The REC survey has consistently shown weaker results throughout this year compared to official employment surveys. Some parts of the official surveys were suspended last month due to low response rates.
The recent REC data for October revealed that the growth in starting salaries for permanent roles was the slowest since March 2021 and below the rates observed before the pandemic. Pay rates for temporary staff also experienced the second-slowest increase since February 2021. Additionally, the overall availability of staff rose at the third-fastest rate since the beginning of 2021.
The report accompanying the REC survey stated, “There were frequent reports that redundancies and subdued hiring activity had contributed to the latest increase in staff availability.”
The findings of the survey demonstrate the ongoing challenges faced by the UK job market. While the decline in hiring has slowed, the sluggish economy and rising redundancies are leading to an increase in the number of job-seekers. The slower growth in pay rates adds to the concerns surrounding the current state of the labor market. Policymakers and industry experts are closely monitoring these developments, hoping for a boost to economic growth and a more favorable job market outlook in the future.
More detail via Reuters here… ( Image via Reuters )