Job Market Report: July 2020
UK Job Market June Report – Main Findings:
Hiring activity falls at much slower pace, redundancies lead to sharper rise in staff supply and starting pay continues to fall markedly.
Every month we receive the latest figures on the employment market in the South and the UK. The Job Market Report UK for July is kindly provided by IHS Markit, KPMG & REC who gather the key statistics from around 400 UK recruitment and employment consultancies.
KEY FINDINGS OF THE UK JOB MARKET JUNE REPORT
- Notably softer falls in both permanent placements and temp billings
- Redundancies lead to near-record rise in candidate supply
- This is resulting in further downward pressure on starting pay.
Commenting on the latest survey results, James Stewart, Vice Chair at KPMG, said:
“With the softest rates of decline seen for five months, it’s encouraging to see the downturn in recruitment easing as parts of the economy reopen.
However, we are still a long way from being out of the woods, with hiring plans remaining on ice and the uncertain outlook still weighing heavily on business’ recruitment decisions.”
Neil Carberry, Chief Executive of the Recruitment & Employment Confederation, said:
“While permanent placements and temp billings still decreased last month across most areas of the country, the pace of decline has slowed hugely as the tide turned on lockdown. With the economy opening up through June and July, we would expect an improving trend in the coming months as firms recover from the worst of the crisis. The fact that demand is now increasing for temporary blue collar and construction workers is also a good sign.
“There are far fewer vacancies in the market than before March, and more people looking for jobs. Recruiters will be key to helping people build confidence and find work – but the reality is that Government needs to help kickstart hiring. Reducing employers’ National Insurance rates would cut the cost of hiring, and a good Brexit trade deal will also support stronger business confidence and investment.”
Notably softer decline in permanent placements
Recruitment activity is moving closer to stabalisation. This month, there was a much weaker fall in permanent staff vacancies across the UK compared to the last four months. Although vacancies still fell, this was the softest decline we have seen since the sharp fall in March. The decline was still linked to the COVID-19 pandemic and the consequent decisions on freezing recruitment or having to make redundancies.
Temp billings downturn eased greatly in July
Temporary billings still fell in July making the contraction for the seventh month in a row. However, the reduction has softened greatly and was the softest since February. The pandemic and economic uncertainty was cited to be the cause of the decline, with many clients cutting back, delaying or scrapping projects. The improvement may also be linked to companies hiring temporary staff to assist with a backlog of work but not needing them long term.
Overall vacancies fall at a softer rate again in July
In July, the fall in vacancies was softer again, and was the slowest for four months. This was across both temporary and permanent vacancies, although permanent vacancies declined at a faster rate which has been the case since the fall began. This softening fall was again seen across both the permanent and public sector. The steepest reductions were seen in the Retail and Hotel & Catering sectors. The weakest drop in demand was meanwhile seen for Engineering roles.
Looking at the second quarter as a whole, the latest labour market data from the Office for National Statistics (ONS) signalled a further sharp drop in total UK job vacancies over the second quarter. On an annual basis, vacancies fell -59.9% in the three months to June. As a result, the total number of vacancies fell to 333,000, which was the lowest recorded since the series began in 2001.
Sharpest rise in staff availability since December 2008
There was another sharp increase in the availability of candidates during July and it was the sharpest registered since December 2008 during the depths of the global financial crisis. This was seen across both temporary and permanent sectors. This was frequently linked to redundancies stemming from the pandemic causing a drop in economic activity. Those on furlough were also seeking new roles due to concerns over the stability of their roles as the furlough scheme slowly comes to an end.
The substantial rise in temporary labour availability was predominantly driven by layoffs due to the pandemic and greater market uncertainty, according to panel members. The number of temporary candidates rose sharply across each of the four monitored English regions, led by the South of England.
Starting salaries continue to fall in July
Starting salaries continue to decrease due to a weaker demand for staff, budget cuts and a larger pool of qualified candidates who are readily available and looking for work. Permanent salaries fell sharply despite the rate of deflation easing. London recorded the sharpest reduction.
Temporary wages also declined. Although softer than May’s 11 year record, it was still among the steepest since mid-2009. Again the availability of candidates was one of the key factors reducing hourly rates of pay.
Sources: Thanks as always to IHS Markit, KPMG and REC for the data provided for our UK Job Market June Report.
Related Dovetail articles:
Follow us to keep up to date with The UK Job Market Report, Recruitment + HR news, as well as our latest jobs, career tips + everything else related to your working world.