Recruitment Outlook Report – November 2024

Realistically, the last REC/KPMG Report on Jobs for 2024 shows a jobs market filled with caution. In the wake of the Autumn Budget, employers have had to step back from hiring plans for the moment while they reassess their own position and how to manage increased staff costs going forwards. That said, this is now notably impacting the pace of salary inflation, which in turn will feed into likely Bank of England decisions to further lower interest rates over coming months, hopefully pushing the economy back into healthy growth. This will bring recovery back to the jobs market.

As Jon Holt, Group Chief Executive and UK Senior Partner KPMG, said, commenting on the latest data, “However, the prospect of further rate cuts through 2025, alongside the Government’s investment plans, both point to improved growth in the near term. This should give businesses greater confidence which may help stabilise the labour market.”

· People being placed in new jobs continues to decline

As expected, the number of candidates being placed in new positions in November continued to decline. Indeed, the rate of decline notably picked up, likely reflecting the pause as businesses waited to hear about the Autumn Budget and then their standing back as they took stock following it. The decline in those being put in new permanent jobs was the steepest fall since August 2023, and we’ve now seen five consecutive months of falls in those being placed in temporary roles.

· Number of vacancies continues to drop

Unsurprisingly, the above goes hand in hand with the report revealing the steepest reduction in vacancies since August 2020. Classically at this time of year, the number of vacancies being advertised drops as employers put off hiring until the New Year. This will be exacerbating the accelerated reduction in vacancies. In total, there have now been thirteen solid months of falls in the demand for new staff. It’s also worth noting that the most recent data reveals the greatest fall in demand for over four years. As expected, this is more significant for permanent job vacancies. Employers typically utilise the flexibility of temporary workers at times like these.

· Which means rising candidate numbers

It therefore follows that there’s a growing pool of candidates looking for new jobs. With fewer vacancies to chase and more redundancies being reported, there are more people looking for work. This has translated into the steepest rise in overall staff availability for three months. Employers are benefiting from larger candidate pools for both permanent and temporary vacancies, but the skills match is still disproportionate and so sifting through more unsuitable applications is becoming a hindrance.

· And salary inflation continues to ease

Again, in line with the above points, salary growth is easing. Especially in light of the increased costs of staff due to the Budget revelations, which is welcome news for employers looking to resume hiring in 2025. It’s still vital to offer competitive salaries to skilled workers, particularly in areas of skills shortages.

Recovery in 2025

2024 has been a tough year for businesses striving for stability and growth against a difficult backdrop. However, it is likely that 2025 will see things start to turn and stability resume, before ultimate recovery. It is also likely that temporary jobs will form the backbone of the recovery, as employers utilise the flexibility to meet their staffing needs. Ultimately, the UK jobs market is strong and resilient, and proves this time and again.

Businesses able to make bold and confident decisions regarding their talent will lead the way with recovery and be able to take advantage of the cream of available candidates. I am here for businesses in 2025, enabling forward-thinking and secure staffing decisions. Get in touch on 0161 359 3111.

We publish an overview of the REC/KPMG Jobs Outlook Report each month to keep you up to date with the UK recruitment and jobs market month by month.

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