The latest KPMG and REC, UK Report on Jobs survey highlighted an accelerated and marked decrease in permanent staff placements across London in October.
Meanwhile, temp billings continued to rise solidly amid reports that uncertainty around the economic outlook had led to a greater preference for short-term workers.
Notably, temp staff vacancies expanded for the first time in seven months in October, whereas permanent vacancies decreased for the eighth month running.
In terms of pay, starting salaries for permanent joiners rose at the quickest pace since February. However, the rate of temp wage growth moderated to a three-month low.
The KPMG and REC, UK Report on Jobs: London is compiled by S&P Global from responses to questionnaires sent to around 100 recruitment and employment consultancies in London.
Sharp and accelerated downturn in permanent placements
Recruiters based in London indicated a thirteenth consecutive monthly contraction in permanent staff appointments during October. The rate of decrease accelerated notably from September to signal a substantial decline that was the quickest in three months. Surveyed recruiters reported fewer vacancies due to economic uncertainty, hiring freezes and a growing preference for short-term labour among clients amid the current climate.
Of the four monitored English regions, London recorded by far the most pronounced drop in placements. The Midlands meanwhile bucked the wider UK trend and recorded a fractional increase.
October data highlighted back-to-back expansions in temp billings across the capital. The rate of increase was slightly weaker than seen in September, but strong overall. A growing appetite for short-term staff among employers was said to have driven the latest upturn.
Three of the four surveyed English regions registered an uptick in billings received from the employment of temporary staff, with London recording the strongest expansion for the second month running. The North of England was the only area to register reduced billings in October.
Latest survey data signalled a further deterioration in demand for permanent staff across London, with vacancies falling for the eighth consecutive month. That said, the rate of reduction eased to the weakest since March and was modest overall.
Meanwhile, a fresh rise in temp vacancies was recorded during October, thereby ending a six-month sequence of contraction. The upturn was modest overall and in line with the UK average.
Permanent staff availability expands at quicker rate
The supply of candidates available to fill permanent positions in London rose markedly in October, thereby stretching the current run of expansion to 11 successive months. The respective seasonally adjusted index ticked up notably from September’s six-month low and was the highest of the four monitored English regions.
According to panellists, redundancies and weakening demand for labour were key factors behind the latest expansion.
The North of England recorded the softest rise in permanent staff availability and was the only English region where the rate of growth eased from September.
Recruitment agencies across London signalled a tenth consecutive monthly expansion in temp staff availability in October. The rate of growth accelerated from September’s five-month low and was historically elevated. There were reports that redundancies as well as fewer projects and vacancies had pushed up the supply of temporary workers available in the market.
The upturn recorded across London was stronger than that seen across the UK as a whole. Only recruiters based in the South of England reported a stronger rise in the supply of short-term workers than London.
Permanent salary inflation quickens to eight-month high
October data revealed a sustained rise in permanent starting salaries across London. The rate of salary inflation was the strongest since February and marked overall. According to anecdotal evidence, increased competition for suitably-skilled labour and the growing cost of living were behind the latest strengthening of pay pressures.
Furthermore, the uptick in starting pay across London was the most pronounced of the four surveyed English regions. Meanwhile, the pace of salary inflation was the weakest across the South of England for the third consecutive month.
As has been the case since March 2021, temp wages continued to increase across London during October. That said, the rate of inflation was the weakest since July and softer than the historical average. The latest uptick was also only slightly quicker than that seen at the UK level. Temp pay growth was the quickest across the North of England.