Recently, recruiters have voiced concerns to the Bank of England regarding a decline in permanent hiring, as businesses continue to grapple with ongoing economic challenges. A new report has revealed a growing mismatch between the availability of new job candidates, which has been increasing at the fastest rate since December 2020, and the number of permanent staff hires, which has experienced the second fastest decline since the pandemic.
The decline in hiring has been attributed to economic uncertainty, with companies across all sectors showing hesitancy to make long-term commitments. Data collected by KPMG and the Recruitment and Employment Confederation (REC) for their latest UK Report on Jobs highlight the downward trajectory of the hiring landscape throughout November.
In particular, London witnessed the most significant decrease in permanent hires across the UK. Derek Mackenzie, CEO of Investigo, a part of The IN Group, emphasised the need for businesses to adopt bimodal planning to navigate economic uncertainty while balancing short-term plans with longer-term business strategies.
As companies face challenges such as generative AI and a shortage of digital skills, Mackenzie stressed the importance of investing in staff to oversee the development of such technologies, ensuring the long-term health of their businesses. He also highlighted the various ways businesses could hire digitally skilled staff without incurring excessive costs, such as offering flexible contracts or recruiting at an entry-level.
Furthermore, the report revealed that despite the competition for skilled workers, starting salaries and temporary pay have seen slower increases due to budgetary pressures caused by the fluctuating economy. The declining hiring rates and slower salary growth have raised concerns about the future of the UK job market.
The release of this report anticipates the Bank of England’s upcoming decision on interest rates, scheduled for December 14th. With the current expectation for interest rates to remain unchanged at 5.25 per cent, businesses are eagerly awaiting the decision’s potential impact on the job market.
In conclusion, the recent report on the state of the UK job market has highlighted the challenges faced by businesses in the midst of economic uncertainty. It has underscored the growing need for businesses to invest in digital skills and staff in order to navigate through these uncertain times and secure their long-term success.
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