Each month, we share the latest labour market trends based on the ‘UK Report on Jobs’ from KPMG and the Recruitment and Employment Confederation (REC), alongside insights from our teams across the regions.
The report is compiled by S&G Global, based on a monthly questionnaire sent to a panel of approximately 400 UK recruitment and employment agencies – including ourselves.
Key Points
Softest decline in permanent placements since March 2023
Rates of pay growth ease
Candidate availability rises
PERMANENT PLACEMENTS
Whilst February still saw a decline in permanent placements, this was at the softest rate since March 2023. The report indicated that some recruiters had noted an improvement in employer confidence, while others felt the market remained subdued—likely reflecting differences across regions and sectors.
PAY GROWTH EASES
January saw a 17-month high in starting wage inflation, whereas February saw a slower rate of growth. Sectors with skill shortages report that competition for hires has continued to put pressure on wages. Meanwhile, recruiters in other sectors note that an increased volume of candidates has had the opposite effect.
CANDIDATE AVAILABILITY RISES
The statistics from February showed a steep rise in candidate availability overall, further loosening of the labour market and increased competition for roles
Neil Carberry, REC Chief Executive, said:
“While February’s report is by no means a source of unalloyed celebration, it does suggest that the worst of the hiring slowdown has passed. There may still be a few bumpy months to come, especially in light of global instability, but the stabilising trend we have seen so far this year has continued. It is notable that regions and sectors most exposed to the industrial strategy seem to be the liveliest.”
“A real turnaround requires growing confidence among businesses and consumers. There is cash in the system to spend if consumers and businesses feel better – a core goal of policy should be to tackle this by reducing the cost of doing business, which will in turn address the rising cost of living. From a more practical approach to the Employment Rights Act, to energy costs, the impact of business tax rises and planning reform, there is plenty to do that could back businesses to grow and create jobs sustainably.”
SUMMARY
Overall, there are encouraging signs that market stability is beginning to return. However, this progress may slow in light of ongoing geopolitical uncertainty, which continues to impact the wider economy—and, in turn, hiring activity.
Closer to home, the huge upcoming changes to employment law in April, alongside the usual annual statutory minimum pay increases, may also influence hiring decisions. For many businesses, SMEs in particular, these added pressures could lead to a more cautious approach in the short term.
If you’re looking for more certainty in your hiring plans, our expert teams are here to help. We deliver the talent you need—on time and on budget. Click here to find your local branch.