Fall in permanent appointments as firms hold off hiring decisions
There was a rapid decrease in the number of permanent staff appointments during January amid reports that firms were postponing hiring decisions due to stricter Covid lockdown measures and substantial uncertainty.
According to the KPMG and REC, UK Report on Jobs: Midlands, temp billings continued to rise, however, with the rate of increase sharp, despite easing.
Demand and supply mismatches continued into the new year, as a renewed fall in demand for temp candidates coincided with a further upturn in vacancies.
Meanwhile, demand for permanent staff declined at the quickest rate for seven months, while permanent staff supply rose sharply again, linked by panellists to ongoing redundancies.
The report is compiled by IHS Markit from responses to questionnaires sent to around 100 recruitment and employment consultancies in the Midlands.
January data highlighted a renewed drop in permanent placements across the Midlands, with anecdotal evidence attributing the fall to stricter lockdown measures and heightened uncertainty due to the pandemic. Furthermore, the rate of decline was the steepest since last May.
At the regional level, the downturn in permanent appointments was broad-based in January. The Midlands saw the most marked fall, followed by the South.
As has been the case in each month since July 2020, temp billings across the Midlands rose during January, as firms opted to take on temporary staff amid substantial uncertainty. The rate of increase was the slowest for six months, but still sharp overall.
Kate Holt, people consulting partner at KPMG, said:
“It’s clear that business confidence has taken a hit with the latest national lockdown. As we’ve seen in some previous months, this has had a knock-on effect on permanent appointments as businesses press pause on long-term recruitment decisions.
“Demand for temporary staff, however, has risen, showing that many across the Midlands are still hiring, and the majority of these roles will be in the blue collar and medical industries. Starting salaries for permanent hires also saw a slight dip as companies seek to manage costs carefully amidst the uncertainty.
“Looking ahead, there is cause for optimism as the vaccine rollout continues, and with the Budget next month, many will be looking to the Government for measures to help the jobs market and revive the UK’s economy.”
