UK Report On Jobs – COVID-19 Leads To Delay In Hiring Plans

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09 June 2020 | Updated 11 June 2020

In a report on the latest recruitment activity from the Recruitment & Employment Confederation and KPMG, the availability of workers in the UK has risen at the quickest rate since July 2009.

The UK Report on Jobs survey also shows that permanent placements and temp billings have declined further amid recruitment freezes, and the weak demand for staff has lead to “downward pressure on pay.”

Survey respondents frequently mentioned that the coronavirus disease 2019 (COVID-19) pandemic and subsequent company closures had led clients to cancel or delay hiring plans. 

The Recruitment & Employment Confederation (REC) is a key voice in the recruitment industry, representing a network of more than 3,300 recruitment businesses and 10,500 individual recruiters.

The report is compiled by IHS Markit from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.

“Given the impact of the lockdown in early May, it’s no surprise that these figures look bleak. But in the two weeks since this data was collected, lockdown rules have been eased and the feedback we get from recruiters every day suggests that the slight improvements that we can see in the placements and vacancies data have continued."

–Neil Carberry

CEO, Recruitment & Employment Confederation

Hiring Activity Remains Weak

Reports of redundancies and furloughed staff led to the quickest increase in candidate availability since July 2009. However, a further marked drop in demand for staff, which was highlighted by a substantial drop in overall vacancies, led to steep falls in starting pay.  

May survey data indicated that hiring activity remained weak across the UK, as permanent placements and temp billings both fell at the second-sharpest rates on record. Recruiters frequently mentioned that the COVID-19 pandemic had led clients to cancel or postpone recruitment plans until the outlook improved.

Recruitment consultancies signalled the quickest expansion in overall candidate availability since July 2009 during May. The upturn was driven by steeper increases in the availability of both permanent and short-term staff. 

Starting Salaries Drop At A Steeper Rate

Other key insights from the report show that:

• Permanent starter salaries fell for the second month running in May, and at the quickest rate since February 2009
• Temp pay meanwhile declined at the fastest rate for 11 years. Recruiters often mentioned that weak demand for staff and budget cuts at clients had driven down pay in May
• Overall vacancies fell at a substantial pace in May, despite the rate of reduction easing from April's survey record. Marked drops in demand continued to be signalled for both permanent and temporary workers, with the former noting the steeper rate of contraction
• Permanent placements fell sharply across all four monitored English regions in May, led by the North of England
• Temp billings fell at softer, but nonetheless severe, rates across each of the four monitored English regions. The quickest fall was seen in the South of England
• Demand for staff declined across both the private and public sectors during May. The steepest reductions in vacancies were once again seen in the private sector, though demand for public sector staff also fell at a historically sharp pace 
• Nine of the ten job categories registered a fall in demand for permanent staff during May. The steepest reduction was seen in retail, closely followed by hotel & catering. Nursing/medical/care was the only sector to record higher vacancies

Neil Carberry, Chief Executive of the REC, commented: “Given the impact of the lockdown in early May, it’s no surprise that these figures look bleak. But in the two weeks since this data was collected, lockdown rules have been eased and the feedback we get from recruiters every day suggests that the slight improvements that we can see in the placements and vacancies data have continued. 

“I’m also hearing from business leaders all over the country that things are starting to look up. There is a long way to go, but it’s time to talk about how we recover from this crisis.

“Collaboration between government, businesses and recruiters will be vital as we try to get the economy up and running again. The UK’s staffing and recruitment companies are experts at helping people find work, and we are ready to support jobseekers in the months ahead.”

Picture: A photograph of a computer screen, showing a graph

Article written by Ella Tansley | Published 09 June 2020

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