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KPMG and REC, UK Report on Jobs: Lingering uncertainty around the outlook leads to greater reliance on temp staff in April

Temp billings expand at quickest rate in seven months as permanent placements drop at steeper pace… Starting pay inflation remains sharp

Commenting on the latest survey results, Claire
Warnes, Partner, Skills and Productivity at
KPMG UK, said:

“The preference for hiring short-term staff
continued unabated into April. Businesses remain
cautious about committing to permanent hires in
the face of ongoing economic uncertainty, which
led to the quickest increase in temporary billings for
seven months.

“Recruitment freezes and candidates lacking
the right skills were also cited as causing this
divergence, with permanent staff appointments
contracting at the fastest rate in two years.

“For businesses looking to hire there are some green
shoots in candidate availability, as supply improved
for the second month in a row. Starting rates of pay
for both permanent and temporary positions are
still rising at historically sharp rates, giving people
an incentive to move roles.

“But skills shortages still dominate the market with
no signs of progress. Government and businesses
must do more to avert this skills crisis.”


The Report on Jobs is unique in providing the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment

consultancies and employers to provide the first indication each month of labour market trends.

The main findings for April are:

Temp billings growth quickens, but permanent staff appointments fall again
UK recruitment consultancies signalled a further shift in hiring preferences from
permanent to temporary workers amid lingering economic uncertainty around
the outlook and rising costs in April. Notably, permanent placements fell for
the seventh month in a row, and at the quickest rate since the start of 2021. In
contrast, temp billings expanded solidly, with the rate of growth the fastest for
seven months.

Supply of workers improves for second month running
April data pointed to a sustained improvement in the availability of candidates.
The rate at which labour supply improved quickened slightly on the month but

remained modest overall. Underlying data showed that a slightly faster rise in
permanent candidate numbers contrasted with a softer upturn in temp staff
availability. Recruiters often linked higher staff supply to redundancies and
workers looking for better paid roles amid the rising cost of living.

Stronger increases in starting pay
Starting salaries for permanent workers continued to rise at a historically sharp
pace in April, with the rate of inflation picking up to a four-month high. At the same time, temp wage growth improved to the highest since January. Higher rates of starting pay were frequently attributed to efforts to attract and secure suitably skilled staff and bumps to pay to reflect the higher cost of living.

Vacancy growth slips to three-month low
Although demand for staff continued to rise in April, the overall rate of vacancy
growth slipped to a three-month low and remained weaker than the series long-run average. The softer upturn in demand was largely driven by a slower
increase in permanent vacancies, as the number of temp roles increased at a
sharper pace.

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