Marvin OnumonuPermanent staff placements dropped again in May, according to the latest Klynveld Peat Marwick Goerdeler (KPMG) and Recruitment and Employment Confederation (REC) UK Report on Jobs survey by S&P Global.
The seasonally adjusted index for permanent staff placements fell to 44.2 in May from 44.7 in April, signalling a slightly sharper rate of decline.
Meanwhile, the index for temporary staff billings edged up to 47.1 in May from 46.3 in April, marking the slowest fall in six months.
Overall demand for staff declined at a slower pace, with the index for permanent vacancies rising to 46.6 (from 43.1 in April) and temporary vacancies to 46.8 (from 43.2), the softest drop in eight months.
Candidate availability increased at the fastest rate since December 2020.
The permanent staff availability index rose to 63.5 in May from 62.8 in April, while temporary staff availability increased to 61.3 from 59.6.
Starting pay for both permanent and temporary roles rose further in May.
The permanent staff starting salaries index increased to 54.1 from 53.3, and the temporary pay rate index rose to 54.4 from 53.9.
Wage growth, however, remained below long-term averages.
Jon Holt, group CEO and UK senior partner at KPMG, said: “May’s data shows very little change.
“Employers are still holding back on hiring, which meant last month the number of jobseekers increased at the steepest rate since 2020.
“The first half of this year has been full of uncertainty for businesses who are still trying to navigate cost pressures, technology advancements and global risks.”
Holt added: “Business leaders will want to see how the new trading agreements with the US and EU, Government spending plans and the Modern Industrial Strategy will drive forward our economic growth.
“To boost the jobs market employers need to feel confident about the outlook and understand how AI will impact their business.”
Neil Carberry, CEO at REC, said: “More encouraging signs in temp billings, vacancies, and stabilising private sector demand offer a measure of optimism as we head into the second half of the year.
“There are early signs of promise, particularly in the Midlands, which saw its first increase in permanent placements in a year and a rise in billings after four months.
“Meanwhile, the downturn in temporary billings has eased further in London and the North of England.”
Carberry added: “The big test now is whether the Spending Review convinces more employers to dance at the party by turning intent on hiring and investing into action.
“The Spending Review delivered a big hit in terms of eye-catching spending on technology and energy, but the lack of announcements on workforce matters is badly out of step with its desire to build a deep pool of talent.
“With the Industrial Strategy imminent, businesses are looking for more than talk of renewal, they want a clear plan for an economic revival.”
He said: “One that acknowledges the central role of good workforce policy – beyond just employment rights.
“That means putting workforce matters at the heart of the agenda, not treating it as a compliance issue.”
