UK recruitment activity continues to weaken during Q1

11th Mar 2024 07:28

(Sharecast News) - Recruitment activity continued to weaken across the UK in the first quarter of the year, according to KPMG and REC, as "ongoing economic uncertainty" and hesitancy to commit to new hires amid cost pressures led to a fall in permanent placements.

The number of Britons placed into permanent positions declined markedly midway through the first quarter of 2024, as uncertainty over the economic outlook led employers to delay or freeze hiring decisions, according to recruiters. At the same time, muted employer confidence and cost concerns led to the steepest reduction in temp billings since July 2020.

Vacancies data showed that overall demand for workers dropped at the quickest rate since the beginning of 2021, while a slowdown in hiring and redundancies drove sharp increases in candidate availability, while pay pressures cooled. Notably, permanent starters' pay increased at the slowest rate since March 2021, while temp pay growth was among the weakest seen over the past three years.

KPMG's Jon Holt said: "The impasse between economic uncertainty and hiring decisions continued into February. Chief Executives tell me they are ready to invest and grow - including taking on new staff - yet the reality is they're being held back by the prospect of weak demand.

"Businesses would ideally have liked a Budget that drives investment, boosts economic growth and helps productivity bounce back. While it was encouraging to see measures to increase labour supply, there was limited headroom for change - only time will tell if the Chancellor's announcements go far enough to shift the dial on the UK's economic outlook."

Reporting by Iain Gilbert at Sharecast.com