The latest Report on Jobs from the Recruitment and Employment Confederation (REC) and financial information services company Markit reveals that, for the first time since September 2012, the number of people placed in permanent positions fell in June this year.
The drop in placements was slight, and it was the first measurable deterioration in the permanent labour market in 45 months. Anecdotal evidence drawn from the recruitment agencies that supplied data for the survey suggests that Brexit uncertainties had taken a heavy toll on permanent hiring. In the run-up to the EU referendum last month, Brexit was cited frequently by survey respondents as the chief reason for hiring caution.
Meanwhile, in the face of these anxieties, temporary/contracting staff billings grew slightly, suggesting that employers are turning to Umbrella Company Employees and other temps in preference to permanent staff to help complete business-critical missions and manage fluctuations in demand.
Pay rates for temporary/contracting staff also increased, albeit at the slowest pace in three months, while permanent salaries grew at their most sluggish rate since September 2013.
Staff availability declined further in June, with the supply of permanent candidates dwindling at a faster pace than the previous month. The availability of temporary/contracting candidates fell at the slowest pace in 33 months.
There was stronger demand for staff in both public and private sectors in June. Overall, it was contractors and other temporary staff who saw the fastest increase in demand in the private sector.
The report also indicated a sharp rise in vacancies for contracting nursing/medical/care workers last month. Vacancies for hotel and catering staff came second, while demand for executive/professional staff grew at the weakest rate.
REC CEO Kevin Green said: “Uncertainty during the run-up to the referendum saw many employers suspend permanent hiring and instead bring in temporary, contractor or interim staff to hedge against potential changes to their growth prospects.
“Whilst it is too early to assess what the impact of the vote to leave the EU will be on jobs, our data underlines the need for uncertainty to be minimised so that our economy and our labour market are not adversely affected. The best thing for business right now is clear and calm leadership and as much clarity as possible on what the post-EU future will look like.”
The REC, he added, was consulting its members, who were so far clearly stating that the best means of securing the health of the labour market, and the economy that depends on it, is retaining membership of the single European market and the ability to access skills across the EU.