In December, the UK experienced a sharper decline in permanent job placements and job vacancies as businesses assessed the effect of tax increases announced in the October budget, according to a report released by S&P Global on Thursday. The KPMG/REC Report on Jobs indicated that permanent placements saw their most significant drop since August 2023.
In light of mounting cost concerns among firms, particularly following the government's budget announcement and the increase in employee National Insurance contributions, the demand for candidates waned in December. Temporary billings also saw a further decrease.
Nevertheless, the report highlighted a willingness among companies to offer higher salaries to attract skilled candidates, leading to a rise in permanent pay inflation to its highest level in four months. Temporary pay rates also increased moderately during December.
Job vacancies have continued to decline since November, reaching their lowest point in over four years. The decrease in temporary staff was the most pronounced in four and a half years.
At the same time, the availability of staff saw the most significant increase since June, with growth primarily driven by the permanent staff category. However, the availability of temporary workers also experienced a substantial rise by the end of 2024.
Neil Carberry, Chief Executive of REC, remarked that "recruitment will be crucial to monitor in early 2025, as it serves as one of the earliest indicators of a wider economic recovery. Any signs of change are highly significant, given the sector's substantial £44.4bn contribution to the UK economy in 2023."
