Ryan FowlerThe UK jobs market saw a challenging close to 2024, according to the latest KPMG and REC, UK Report on Jobs compiled by S&P Global. Permanent placements fell at their fastest rate since August 2023, reflecting increased cost scrutiny by employers following the late-October Government Budget and the announced rise in employee National Insurance contributions. Temporary billings also declined at a faster pace than in November.
Despite declining placements, firms remained willing to offer higher starting salaries to attract and retain top talent. The rate of permanent salary inflation reached a four-month high, although pay growth was constrained by a significant increase in staff availability, driven largely by redundancies reported in December.
Jon Holt, group chief executive and UK senior partner at KPMG, commented: “As we start the new year, it’s a muted one for the UK jobs market. December’s data shows weakening demand causing the biggest contraction in vacancies since August 2020, coupled with hiring intention declining at a pace not seen for 16 months. However, as 2025 progresses and UK economic growth picks up, businesses will need new talent. Salary inflation being at its steepest in four months shows they are still willing to compete for it.”
Neil Carberry, REC chief executive, noted: “This report emphasises a weak mood in some businesses as they built their budgets for this year, and made changes designed to save on costs after a tough Budget. That said, sentiment can change quickly. December is always a hiring low point, and a new year brings new hope – with inflation under control, low unemployment and economic growth expected, the fundamentals are better than many appreciate.”
Vacancy numbers contracted sharply in December, with the steepest decline in permanent staff demand since August 2020. Temporary staff demand also fell at its fastest pace in over four years. However, regional variations revealed that the Midlands saw modest growth in temporary billings, bucking the national trend.
