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Recruiters report the most difficult conditions for the British job market since the COVVI-19 pandemic, without any signs of employers who regain confidence to hire Rachel Reeves’s tax budget in October.
A monthly survey by KPMG and the Confederation of Recruitment and Employment, published on Monday, indicates the absence of the most widespread request for the staff request since August 2020, the vacancy index of the survey having gone to 42.9 in December at 41.6 in January.
Any reading less than 50 means that the share of recruiters reporting a weakening of the market prevails over action reports in terms of improving conditions.
The agencies also placed fewer people in permanent and temporary jobs last month, the temporary invoicing index going strongly from 46.3 to 41.5, the lowest since June 2020.
The CEO of REC, Neil Carberry, said it was lower than the usual slowdown in post-Christmas on the temporary market, because many companies kept investment plans until the economy resumes.
The decision of the Bank of England last week to reduce interest rates by 0.25 percentage points to 4.5% would help, as is the government’s pressure to promote economic growth, said Carberry.
But he added: “An autumn of tax gloom, difficulties to navigate in future tax increases and. . . A new expensive approach to employment rights acts all as brakes on progress. »»
The KPMG / REC report is the last of a series of surveys noting that employers have become more reluctant to face new employees, because the chancellor in October has established an increase of 25 billion pounds sterling in national insurance insurance contributions employers.
Reeves defended politics, as well as an increase in national natural salary, which should both take effect in April. But business leaders have warned that increasing cost, going to low growth and growing trade tensions, will result in the workforce reductions. »»
Economic discomfort has wreaked havoc on the government of Sir Keir Starmer, and Deputy Prime Minister Angela Rayner said that she could “fully understand people’s frustration”.
“We were elected on a change mandate,” she told the BBC. “People want to see him immediately. But returning it will take a little more than seven months.
“Keir has been completely open to want to do his best for the country. He will not do what he thinks is popular. He wants to deliver. No one is a worst critic of Keir than Keir. »»
Until now, the slowdown in hiring does not seem to have been equaled by generalized job losses for existing employees, although the image has been darkened by the absence of reliable official data on the labor market .
Figures based on tax files suggest that the number of employee employees has only decreased slightly since last summer. There was no significant collection in the redundancy notifications submitted by large employers, according to figures at the end of January.
Announced the drop in interest rates last week, the BOE monetary policy committee said it was judging the labor market in equilibrium, the unemployment rate largely stable in recent quarters.
This marks a return to normality, after what the BOE called a market for “exceptionally tight” jobs from the pandemic, where many employers have had trouble fulfilling the positions. The Central Bank said that despite the clear weakening of GDP growth, companies still had only a little spare capacity.
The prices have however experienced a risk that employers would more significantly reduce the workforce in response to higher taxes – especially in the sectors where many staff members have been paid at the minimum wage, which makes it impossible to compensate for the increase nicks by compensation of compression.
The KPMG / REC survey has shown that recruiters report widespread falls in vacant posts in all sectors, including unpaid areas such as hospitality that until recently had acute staff shortages.
They also reported much less health roles, following a repression on the use of agency workers by NHS Trusts. However, the strongest falls in vacant posts were in more paid professional areas and in the technology sector, which has undergone a long -standing collapse.
Recruiters have seen more candidates for work research even though the job offers drying, leading to a relaxation of salary pressures.
However, the KPMG / REC survey underlined lower wages growth than other measures for several months, which suggests that employers are no longer ready to pay a large bonus to guarantee a new rental, but are still confronted with Requests of existing staff to recover the land lost during the cost of living crisis.
