REC Report on Jobs August 2023: Key Takeaways

As KPMG and the Recruitment & Employment Confederation release their latest comprehensive guide to the UK labour market, we summarise the topline takeaways from the report.

Staff Appointments

Permanent staff appointments continued to fall for the eleventh straight month, with the decline seen in August at the sharpest in over three years. This decline continued to be linked to uncertainty over the economic outlook and the subsequent slowdown of staff hiring, with many noting recruitment freezes and efforts to control costs. This fall was noted across all regions, but most significantly in the Midlands.
Meanwhile, following a previous three year period of expansion, the data revealed a slight reduction in temporary staff placements, albeit marginal. This was largely attributed to caution around the economic outlook and increased budgets pressures. During this period, all areas monitored registered a drop in billings, with London seeing the quickest reduction overall.

Vacancies

Vacancies continued to expand for both permanent and temporary roles across the UK during August, though total vacancies increased only slightly, marking the slowest increase in job openings since the current period expansion began two and a half years ago.
The period saw a marked slowdown in permanent vacancy growth, the weakest seen in the last 30 months, though temporary vacancies expanded at a solid pace that remained unchanged from the figures seen in July.
The strongest increase in demand was seen for temporary staff in the private sector, with only a slight rise for these vacancies in the public sector. The increase in demand was led by Hotel & Catering with demand for temporary Executive/ Professional workers stagnating, and falling in the Construction and Retail categories.
Demand trends meanwhile diverged for permanent staff, with vacancies broadly unchanged in the private sector but rising modestly in the public sector. Hotel & Catering recorded the strongest rate of vacancy growth, followed by Accounting/Financial. Secretarial/Clerical and Retail meanwhile saw the steepest falls in demand.

Staff Availability

The data revealed a continued rapid increase in overall availability of staff across the UK in August, with a softer rise in permanent staff supply contrasting a steeper increase in temp candidate numbers.
The supply of permanent staff across the UK increased for the sixth straight month in August. The rate of growth slowed from July but was nevertheless the second-sharpest seen since December 2020. Redundancies were the principal cited for the upturn in candidate availability, along with a slowdown in hiring activity.
London recorded by far the steepest increase in permanent candidate numbers, while the softest was seen in the South of England.
Temp candidate numbers also continued to see rapid expansion, with the sharpest increase since December 2020, again attributed to layoffs, and a hesitancy to take on additional staff.
This increase was seen nationwide during August, most notably in London, by a large margin.

Pay Pressures

The average starting salary awarded to permanent workers across the UK continued to increase in June, albeit at the joint-softest rate since March 2021. According to panel members who were surveyed, shortages of specific candidates, counteroffers and the rising cost of living all pushed up salaries, all continue to drive this increase.
The North of England again registered the steepest upturn in permanent pay, whilst the South of England continued to see the softest increase in August.
UK recruitment consultancies signalled a further rise in short-term pay during August, stretching the current period of wage growth to two-and-a-half years. The rate of inflation picked up from July's 29-month low, but remained among the slowest seen over the current period of increase. There were reports of employers offering higher pay for highly-skilled and desirable candidates which were often in short supply.
The continued temp wage increase was registered across all monitored areas with the steepest rate seen in London by far.

Report summary