The latest Markit/REC Report on Jobs, published today, reveals permanent placements dropping at an accelerated rate in July, the second consecutive month to see a decline, while temporary/contracting placements continued to rise.
Not only did the number of people placed in permanent positions fall for the second consecutive month in July, but the rate of decline accelerated to its sharpest pace since May 2009. Recruiters frequently cited uncertainties arising from the Brexit vote as a key influence in the slowdown. Recruitment consultancies based in London reported a particularly marked ‘Brexit effect.’
Meanwhile, as the REC had previously anticipated for the immediate post-Brexit era, temporary billings went on climbing in July, with growing numbers of panellists reporting that clients were shifting their hiring focus to Umbrella Company Employees and other short-term contract workers in the midst of new uncertainties in the economic climate borne of the Brexit result. Even so, the rate of increase in temp billings fell to its slowest pace in ten months.
Salaries for successful permanent candidates climbed further in July, although the rate of increase slumped to its lowest pace in 38 months. Pay rates for temporary/contracting staff also climbed, but at its slowest rate since February.
Candidate availability continued to decline in July, with the rate of decrease for permanent staff easing to the slowest pace since October 2013. The decline in temp/contractor candidate availability was less marked but fell to its slowest pace since February this year.
Regionally, London bore witness to the greatest decline in placements, although decreases were also recorded in Scotland, the Midlands and the South. The only region to buck the trend with an increase in placements was the North, although the rise was the weakest in three years.
Temp billings, meanwhile, climbed across all regions except London, which saw the most marked decline in seven years.
The private sector showed a noticeably higher demand for new staff than the public sector, with private sector temporary/contracting workers registering the fastest increase overall. Nursing/Medical/Care staff topped the demand league tables for both permanent and temp/contract workers.
Kevin Green, the REC’s CEO, said that the jobs market had “suffered a dramatic freefall in July, with permanent hiring dropping to levels not seen since the recession of 2009.” However, he added: “While there are worrying signs, it’s important we don’t jump to conclusions from one month’s data. The truth is we don’t know what long term consequences the referendum result will have on UK jobs; with the political situation becoming more stable and the Bank of England making sensible decisions, we may well see confidence return to the jobs market more quickly than anticipated.”