Growth in hiring activity slows again in July amid heightened economic uncertainty, data shows

UK recruiters reported a further slowdown in growth in hiring activity in July, research has found.

The data was part of the latest Report on the works by KPMG and the Recruitment and Employment Confederation (REC), which is based on responses from a panel of 400 UK recruitment and employment firms between 12 and 25 July this year.

The findings highlighted that amid economic uncertainty, organizations became cautious about new hires, with permanent appointments and temporary billings seeing their slowest increases since March 2021.


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Along with the slowdown in hiring, job vacancy growth slowed to its lowest level in 16 months and recruitment consultancies reported a further surge in demand for staff in July.

Additionally, as has been the case since March 2021, the supply of workers across the UK fell again in July. Although the reductions were rapid and much faster than the long-term average, the rate of reduction was still the slowest observed in 15 months.

The decline in the availability of permanent and temporary workers eased from the previous month, but recruiters still reported widespread skills shortages, fewer foreign workers available and greater reluctance by candidates to apply for new positions. , as economic uncertainty raised concerns about job security.


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Commenting on the reservations of organizations and candidates, Claire Warnes, head of education, skills and productivity at KPMG UK, said that given the difficult economic outlook, employers were rightly hesitant about their plans for employment. hiring, “but to compound this, a lack of qualified applicants and a general skills shortage in most sectors is keeping starting salaries high.”

As the cost-of-living crisis continued to bite and more and more workers chose to stay in their jobs rather than risk job security, Warnes said that “the focus on upskilling workers and attracting talent remains absolutely essential for UK businesses to play their part in boosting the economy”.

Despite the fluctuations, Darren Hayman, managing director of Macmillan Davies, pointed out that there was still very strong demand for talent, particularly in the recruitment market.

“Supporting this, we’ve seen an increase in reward-related positions, which shows the business importance of hiring,” he said.

Hayman also said a number of companies are now hiring internal recruiting and talent acquisition roles, “demonstrating the need for new permanent talent.”

The survey also reported a general increase in demand for staff in both the private and public sectors, with permanent positions in the private sector seeing the largest increase in vacancies.

Looking at differences between industries, the results point to a pick-up in demand for agency workers in July, with hotel and restaurant businesses seeing the largest increase in job vacancies. The smallest increase in demand for short-term workers was seen in accounting and finance.

Kate Shoesmith, REC’s deputy chief executive, pointed out that existing labor and skills shortages are restricting opportunities for the private and public sectors to meet consumer demand, warning that “these constraints could cost the ‘British economy up to £39billion a year if we don’t work to fix these problems now’.

With that in mind, she said it was “critical that government and businesses start prioritizing their employees and their staffing strategies.”

Shoesmith also believed that improving the provision of skills training, increasing employment of underrepresented groups, good transport, childcare and immigration systems were more important than ever for help strengthen the economy and the labor market during this turbulent time.

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