The job market is facing a renewed downturn as hiring freezes and cost-cutting measures take hold amidst economic uncertainty.
Recruitment analysts have reported a significant decline in permanent job placements, marking the fifth consecutive month of contraction, according to the latest UK Report on Jobs from KPMG and REC.
March witnessed a further dip in demand for staff, coupled with an increase in redundancies across the country.
Moreover, the report highlights a slowdown in pay growth, with starting salaries for permanent positions rising at their slowest pace in over three years, as businesses grapple with interest rates and inflationary pressures.
Job market slide & persistent economic uncertainty
Jon Holt, Chief Executive and Senior Partner at KPMG UK, attributed these findings to persistent economic uncertainty, leading many business leaders to defer major investment decisions and rely on savings for growth in the first quarter of the year.
“Tightening budgets have also impacted temporary staff wages, with March seeing the sharpest decline since July 2020,” noted Holt. However, he remains cautiously optimistic about the future, citing business leaders’ confidence in the economy improving, especially with potential interest rate cuts by the Bank of England.
Derek Mackenzie, CEO of Investigo, emphasised the importance of prioritising staff amidst economic uncertainty. “Organisations need to emphasise staff as a top priority and utilise their skills to fuel growth,” Mackenzie stated. He pointed out that while economic challenges persist, investing in competitive differentiators such as career progression opportunities, flexible working policies, and training programs can help attract and retain talent.
Sjuul van der Leeuw, CEO of Deployteq, highlighted the critical need for tech-savvy staff in driving growth and innovation. “AI continues to advance rapidly, and organisations must priorities finding and attracting staff with the necessary skills, particularly in sectors like marketing technology,” said van der Leeuw.
These insights come on the heels of the launch of the London Growth Plan by Sadiq Khan and Rachel Reeves, aimed at creating 150,000 highly-skilled, highly-paid jobs in the capital by 2028. As the job market faces ongoing challenges, it remains crucial for businesses to adapt and prioritise talent to navigate through the turbulent economic landscape.
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.
