Recruitment Outlook Report – October 2024

The UK job market saw significant shifts in October 2024, with continued declines in both permanent and temporary appointments as economic uncertainty affects hiring decisions.  What we’re witnessing is a continued landscape of caution as employers hold fire and adjust to increased costs and manage their businesses in a tough economic climate. The recent budget will take some adjustment for employers, and it’s inevitably impacting on hiring. Let’s take a closer look at the latest KPMG and REC Report on Jobs to help inform your business decisions.

Decline in Staff Appointments

October continued the downward trend in new hires to permanent jobs, which has been ongoing for over two years now. In fact, the drop in permanent hiring this month has been the steepest since March, as many businesses implemented hiring freezes. This hesitancy largely stems from the uncertainty surrounding the recent government budget, which has caused companies to hold back on filling roles. Interestingly, the decline was not limited to permanent roles; temporary hiring also saw its sharpest reduction in seven months.

Slowdown in Salary Growth

October saw a continued weakening in permanent starting salaries, marking the lowest growth rate since February 2021 – good news for employers struggling to keep pace with the rate of salary inflation. While there’s still a willingness to offer higher pay for high-quality candidates, the larger candidate pool and subdued hiring activity have eased pressure on salary inflation. Temporary wages, which had remained stable in September, ticked up modestly, but the rise was still below historical averages.

Falling Vacancy Numbers

The demand for staff shrank again in October, extending a 12-month contraction. The reduction in vacancies was the steepest since early 2021 and affected both permanent and temporary roles across public and private sectors. While blue-collar and engineering sectors managed to maintain some growth, most sectors, including retail and IT, experienced declines. The private sector, which generally offers more temporary roles, saw a noticeable dip, with firms cautious about adding headcount amid ongoing economic challenges.

Rise in Staff Availability

Staff availability has increased for the twentieth consecutive month, as more candidates become available due to lower demand and redundancies. This trend applies to both permanent and temporary candidates, with London and the North seeing the largest growth in available permanent candidates. This increased availability reflects a job market that is more favourable for employers, with a greater choice of candidates for each role, especially in regions with stronger rises in availability.

Looking Ahead

As we move into the coming months, the focus will likely be on how businesses and candidates adapt to the ongoing shifting landscape. The recent budget’s impact on hiring policies remains a key factor, as businesses weigh new tax burdens and NI obligations and economic outlooks against their staffing needs. The wider availability of candidates suggests that employers may continue to hold the advantage in terms of recruitment, especially in sectors experiencing slower growth. Temporary roles could offer opportunities for those seeking immediate work, but the overall slowdown underpins continued caution.

For those employers looking to hire, this backdrop puts them in a stronger position than of late as it’s now more viable to secure good candidates at fair rates. It’s important to consider taking advantage of these optimal hiring conditions so that your business is ahead of the curve with talent when momentum begins again. Furthermore, now is the time to secure exceptional management and leadership, primed to navigate your business through the times ahead.

In a complex recruitment market, it’s vital that businesses are supported to make sound, profitable and future-proofed recruitment plans. We have the reputation and expertise you need. Get in touch on: 0161 359 3111 or email sharon@firstgroupsolutions.co.uk

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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