As we approach the final quarter of 2024, the UK labour market finds itself at a crossroads. The latest KPMG and REC UK Report on Jobs, released today, paints a picture of a job market in flux, grappling with ongoing economic uncertainties and shifting dynamics between employers and job seekers. This monthly report, compiled from responses of around 400 UK recruitment and employment consultancies, has long been a bellwether for the health of the nation's job market.
September's findings come at a particularly crucial time, with the UK economy still navigating the aftermath of global economic shocks, evolving work patterns post-pandemic, and the looming shadow of the upcoming Budget. The report offers valuable insights into hiring trends, salary movements, and the overall sentiment of both employers and job candidates.
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As businesses, policymakers, and workers alike look for signs of stability or recovery, this month's data provides a nuanced view of a labour market that is clearly softening, yet still showing resilience in certain areas. From permanent placements to temporary billings, from salary trends to staff availability, the report covers a comprehensive range of indicators that together form a mosaic of the current employment landscape.
Let's delve into the key findings from the September 2024 report and explore what they might mean for the future of work in the UK:
Decline in Permanent Placements The number of permanent staff appointments fell for the 24th consecutive month in September. While the rate of decline eased slightly from August's five-month record, it remained marked. This downturn is largely attributed to economic uncertainty, particularly ahead of the upcoming Budget.
Temporary Billings Also Affected Temporary billings declined at an accelerated rate, reaching the steepest fall since April. This trend reflects tight client budgets and an uncertain business environment.
Salary Growth Slows Although permanent starting salaries continued to rise for the 43rd month in a row, the rate of inflation was the slowest in this sequence. This moderation in salary growth is likely due to increased candidate availability and cooling market demand.
Temporary Wages See Marginal Decrease For the first time in three and a half years, temporary pay rates saw a slight decrease. This shift is attributed to a larger pool of candidates and fewer available roles.
Staff Availability Increases The availability of both permanent and temporary staff rose sharply in September, extending the current growth period to 19 months. This increase is linked to higher redundancies and reduced demand for staff.
Vacancy Numbers Continue to Fall September marked the 11th consecutive monthly decline in staff vacancies, with the rate of contraction accelerating to its steepest since March.
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Looking Ahead
The report suggests that the UK job market is in a holding pattern, waiting for signals of economic direction. With the upcoming Budget and potential changes in interest rates, businesses appear cautious about hiring. The moderation in pay growth could influence the Bank of England's decisions on interest rates in the coming months.
As we approach the end of 2024, it will be crucial to monitor how government policies and global economic conditions impact the UK labour market. The balance between supporting workers through adequate wages and maintaining business sustainability remains a key challenge for policymakers and employers alike.
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