The KPMG and REC UK Report on Jobs for July 2024 provides an in-depth analysis of the UK labour market and serves as a crucial indicator of the UK’s employment landscape. The ongoing trend shows resilience, but slight decline in the overall jobs market. However, with recent interest rate drops, and greater stability now the election is behind us, we can expect employer confidence to regain traction soon. It’s also worth noting that different sectors and regions are affected differently by the overall downturn. For example, skills shortages in manufacturing and engineering ensure demand is high and the number of available jobs in the sector is thriving.
Here’s our summary of everything you need to know.
Permanent jobs in decline, but it’s easing
There has been a continued decline in candidates being placed in permanent jobs, marking the 22nd consecutive month of downturn. However, the rate of contraction has eased slightly since June. The primary factors driving this trend include a reduction in vacancies and an increase in candidate supply. Permanent vacancies continue to grow in the engineering sector.
Temporary jobs largely stable, but demand higher in the North
Meanwhile, the number of temps being used by employers is fractionally down, offsetting the marginal growth we saw in June. The decline in temporary jobs is attributed to lower activity levels at companies and it seems that fewer temporary contracts are being renewed. However, it’s important to note that this isn’t a consistent picture across the UK. Indeed, the North of England has seen an increase in the number of temporary workers being used.
Salary growth continues, but is slowing down
Salary growth continued in July but at a slower rate compared to previous months. Permanent salaries have been rising for nearly three-and-a-half years, driven by the scarcity of suitable candidates and employer willingness to pay more to attract talent. The most significant salary increases were observed in London, followed by the North of England.
Temporary pay rates also increased in July, although the rate of inflation was marginal and the weakest in the past 41 months. The rise in temporary pay rates is linked to shortages of suitable staff and the impact of previous increases in living and minimum wages. However, the increase in temporary staff availability has weighed down pay inflation, with the steepest rise in temporary pay rates seen in the North of England.
Candidate availability continues to grow
The availability of candidates for both permanent and temporary positions continued to rise in July, marking the 17th successive month of increased candidate supply. This rise is driven by higher redundancies and a reduction in demand. Despite the increase, the growth rates were softer compared to June.
Demand for staff declines marginally
Demand for staff showed a marginal decline in July, extending the current period of contraction to nine months. The rate of reduction, however, was slower than in June. Permanent vacancies continued to fall, marking the 11th consecutive month of decline, albeit at a modest pace. Conversely, there was a second consecutive monthly rise in demand for temps, with growth stronger than in June. Private sector permanent vacancies saw a slight increase, while temporary vacancies in the private sector rose for the fourth consecutive month to the highest levels since October last year. Much of the decline is centred on public sector vacancies.
Overall, the latest data reveals a nuanced picture of the UK labour market. The challenges continue, but there are signs of optimism. It’s also worth noting that permanent jobs are increasing in London and that’s often a sign that the rest of the country will soon follow suit. As Kate Shoesmith, REC Deputy Chief Executive, aptly noted,
“Employers are gradually emerging from the woods, gaining optimism for their businesses and the broader economy.”
This cautious optimism may pave the way for a more robust recovery in the coming months.
We publish an overview of the REC/KPMG Jobs Outlook Report each month to keep you up to date with the UK recruitment and jobs market month by month.
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