New data from Adzuna indicates that the UK jobs market is slowing appreciably, possibly because uncertainty over the forthcoming EU referendum is dampening hiring activity.
Whereas last November, when Adzuna’s UK Jobs Market Report recorded 1,244,772 job vacancies in total, by February this year this had plunged by 10.3 per cent to 1,116,202. Over the last three months, employer hiring activity has weakened significantly, reversing the trend of consecutive improvements in the jobs market for each of the ten months prior to November 2015.
According to Adzuna co-founder Doug Monro, a new mood of caution has infiltrated the UK jobs market. He said: “One possible explanation is that uncertainty around Brexit means hiring intentions have been paused. After a strong hiring outlook in the latter months of last year, it’s possible that attitudes to recruitment have begun to alter of late. Companies seem to be holding off on expanding their staff, instead preferring to sit tight and wait out the political bumps of the next couple of months. For jobseekers, this means fewer available positions and fewer choices are on offer.”
Mr Monro also noted the impending impact of the new National Living Wage, which comes into effect in April.
The Adzuna figures underscore a pressing problem for UK businesses. The latest JobsOutlook survey from the Recruitment and Employment Confederation (REC) showed that the vast majority (95 per cent) of employers report that their businesses are near to or at full capacity, rendering them unable to take on additional work with existing headcounts.
The REC survey indicated that hiring confidence was relatively robust amongst larger employers but was weakening amongst smaller businesses. The organisation’s CEO, Kevin Green, also attributed this development to the impact of the National Living Wage and the EU referendum.
When permanent hiring falters, many businesses turn to contracting professionals on a temporary basis to help manage surges in demand or complete business-critical projects. However, even this solution may be less available starting in April.
Due to a recent widening of the definition of workers who are subject to the supervision, direction or control (SDC) of the end client, many Umbrella Company Employees – traditionally regarded by recruiters, end clients and themselves as independent contracting professionals – will be re-designated (for tax purposes only) as end client employees.
This will mean that they are no longer entitled to claim tax relief on their substantial travel and subsistence expenses. Contracting workers tend to travel far greater distances to temporary workplaces than permanent employees, but as a result of the rule change, many of them are likely to be reluctant to do so, depriving many businesses of the skills they would otherwise have provided.