Blog Img

UK Report on Jobs August 2024: UK Job Market Continues to Face Challenges

Back to Blogs

​The latest KPMG and REC UK Report on Jobs, released this week, paints a picture of a job market still grappling with economic uncertainties. As we dive into the details, it's clear that the employment landscape is evolving in response to various factors, from government policies to global economic trends.

  1. Permanent Placements Decline Sharply August saw the steepest fall in permanent staff appointments since March, extending the downturn to 23 months. This trend reflects a cautious approach by employers, who appear to be holding back on hiring amid economic uncertainty and a lack of vacancies. The report states: "Panellists reported reduced demand, some uncertainty in the economic outlook and a lack of vacancies as reasons for the latest decline."

  2. Temporary Billings Also Down While not as severe as permanent placements, temporary billings also decreased slightly for the second consecutive month. The report notes: "A lack of demand for temp workers was cited by some recruitment consultants, with clients reportedly cutting costs or not renewing contracts."

  3. Candidate Availability Continues to Rise The availability of both permanent and temporary staff increased for the 18th month in a row. The report explains: "A mixture of redundancies and lower placement volumes reportedly led to the rise in availability."

  4. Salary Growth Slows Although permanent starting salaries continued to rise, the rate of increase was the weakest since March. The report states: "Panellists noted that clients remained willing to pay higher salaries to attract suitable staff, especially in areas where the supply of candidates remained low."

  5. Mixed Picture Across Sectors IT & Computing saw the steepest decline in permanent vacancies, while Nursing & Medical Care experienced the fastest growth. For temporary roles, Executive & Professional saw the biggest drop, with Blue Collar showing the strongest growth.

  6. Regional Variations Paint a Complex Picture The job market shows notable regional differences. The report highlights: "The steepest fall in placements was seen in the South of England. In contrast, there was little change recorded in the North of England."

  7. Cautious Outlook Amidst Policy Changes Jon Holt, Chief Executive of KPMG UK, commented: "While lower inflation has brought welcome stability to some sectors, and despite a first rate cut in August, monetary policy continues to be restrictive, which means that overall business confidence continues to fluctuate."' Neil Carberry, REC Chief Executive, further emphasised: "August is always a difficult market to judge because of the summer break, but this month's survey supports what we have been hearing around the country – employers are still cautious. They are waiting for a clear signal that sustained demand is around the corner."

  8. Looking Ahead: Policy Impacts and Market Adaptation Carberry also noted: "The new government said growth was its main priority – but it needs to deliver now. A vision for a positive, prosperous Britain has to accompany the fiscal realism that is being served up right now."

  9. The Importance of Temporary Work The report highlights the critical role of temporary workers, stating: "According to ONS data, as of April 2024 there are 1.42 million temp workers, with the REC's latest RISR report finding that 900,000 people are placed on assignment every day by recruitment agencies."

  10. Skills in Demand Despite the overall downturn, certain skills remain in high demand. The report lists skills in short supply for permanent staff, including "Accountants, Compliance Professionals, Software Engineers," and for temporary staff, "Skilled Trades, Nurses, Data Engineers."

In conclusion, the August 2024 KPMG and REC UK Report on Jobs underscores the ongoing challenges in the UK job market as it navigates economic uncertainties. Holt summarises the situation: "The news that while salaries rose last month it was at the weakest rate since March could help make the case for more rate cuts when the Monetary Policy Committee meets to decide the future path of interest rates."

Carberry offers a final thought on the way forward: "Pay growth has returned to a more normal level, which should reassure the Bank that the positive signal of beginning to cut interest rates was the right call. Firms will welcome this – but they are concerned by the potential challenges of the government's labour market agenda."

As the government introduces new policies and the economy continues to evolve, both employers and job seekers will need to remain adaptable. The coming months will be critical in determining whether the current cautious approach gives way to renewed confidence and growth in the UK job market.