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Today’s survey of 400 recruitment and employment consultancies by KPMG and the Recruitment and Employment Confederation (REC) revealed that hiring continued to fall in March.
The survey found that demand for permanent staff is falling significantly faster than temporary staff.
At the same time, the number of available employees accelerated rapidly in March, marking the fifth consecutive month of growth.
At the same time, salary growth for regular employees is at its lowest level in more than three years. For temporary staff, growth is the slowest in four months.
This is despite real wage growth strengthening last quarter, according to the latest labor market data from the Office for National Statistics (ONS).
REC chief executive Neil Carberry explained the decline in recruitment was an ongoing trend.
He said: “Falls in permanent roles have been steady for several months and temporary hiring remains strong, even if it is down from the record highs in 2022/3.
“Employers appear to be favoring temporary work while they are uncertain about the future of the economy.”
read more: Job openings fall while real wage growth strengthens
Ben Keighley, founder of Socially Recruited, an artificial intelligence recruitment platform, said human Resources The magazine said employers have been waiting for a stronger economy before hiring.
He said: “Consensus is likely that the UK recession will be shallow and short-lived, but economic weakness is still affecting employer sentiment and slowing the creation of new jobs and staff replacement in some industries.”
Lennie Higgs, director of ManpowerGroup UK, explained that employers may be attracted to more temporary workers due to recent economic uncertainty.
talking human Resources magazine, she said: “The UK labor market appears to have entered a period of stabilization and is currently undergoing some reset.
“One reason why temporary workers may be more popular right now is the near-term economic uncertainty, including a slight recession in late 2023.”
Higgs attributed March’s increase in labor supply to a decline in job openings last quarter. ONS data shows that from December 2023 to February 2024, the number of job vacancies in the UK decreased by 43,000 to 908,000 for 20 consecutive cycles.
She continued: “The recent increase in labor supply is partly attributable to a decline in overall job vacancies and partly to cost of living pressures, meaning more people classed as economically inactive are now looking to re-enter the labor market.
read more: How can silent recruitment help address skills shortages?
“This rise is also largely due to a severe and ongoing mismatch between available talent and advertised vacancies.
“The increase in candidates may be one of the reasons why we’re seeing slower salary growth, although it’s worth noting that salaries typically lag behind inflation, which has been falling steadily in recent months.”
Keighley said slower wage growth was affecting the way employers recruit.
He commented: “Overall, the market remains very tight, with vacancy rates still well above pre-pandemic levels. The number of unemployed job seekers is not even keeping up with employer demand.
“That’s why many employers are instead focusing on luring new employees away from other jobs and targeting ‘passive candidates’ – people who are already working but might want to move if approached in the right way.
“At the same time, hiring costs are falling as inflation falls and wage growth slows. Many employers believe they no longer need to offer such high wages to new hires or significantly raise wages for existing staff, Because cost-of-living pressures are no longer as pressing as they once were.”
Higgs recommends employers focus on skills-based hiring in the current job market.
She added: “There are no quick fixes to this situation, but we recommend that employers of all sizes and industries put a greater emphasis on skills-based recruitment, workplace culture and employee value proposition if they want to retain and attract the best talent. Recruiting talent during this challenging time.”
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