The costs of the new National Living Wage (NLW) and the prospect of a Brexit result at the upcoming EU referendum are depressing salaries and slowing advertised vacancies for permanent staff, the latest UK Job Market Report from jobs search website Adzuna reveals. According to Adzuna co-founder Doug Monro, however, contracting professionals may see a rise in demand for their services as hirers turn to temporary appointments to ensure business-critical projects are completed.
The Adzuna data is in line with recent polls by the Institute of Chartered Accountants in England & Wales (ICAEW) and market research company GfK, both of which indicated a significant decrease in business and consumer confidence in the current economic climate and a corresponding easing in permanent hiring.
In addition, new data from CV-Library also reveals that uncertainty about the EU referendum result and rising business costs stemming from the NLW are squeezing salaries for permanent hires.
The Adzuna report reveals that average advertised salaries rose by just £15 between February and March this year, climbing from £33,800 to £33,815. In the three months prior to that, monthly rises of 0.6 per cent, 0.8 per cent and 0.6 per cent were seen. The new average represents a year-on-year drop of 2.0 per cent.
The report identifies a new mood of hesitancy in the jobs market, borne of Brexit fears and the impact such an outcome will have on UK businesses as well as new costs stemming from the introduction of the NLW.
Commenting on the report, Mr Monro noted that the UK jobs market was entering a turbulent time, with unemployment starting to climb again and political uncertainty over the EU denting hiring plans. However, he indicated that Umbrella Company Employees and other contracting professionals may be the chief beneficiaries of the new mood of business caution.
He said: “In particular, recent reports indicate hiring permanent staff may be being put on pause until after the EU referendum as employers turn to temporary workers to fill gaps. Predictions of risks to jobs and the economy show how vulnerable the employment sector can be to wider economic change.”
Mr Monro went on to say that nerves about larger wage bills in the wake of the NLW could result in staff perks being amongst the first expenses to be cut as companies seek to fund their extra costs. Reports of these measures were already coming in, he said, citing the example of overtime pay, which was “already taking a hit.”