July 2024 UK Labour Market Report: Overall Inflationary Pressure Easing, Consumer Confidence Growing

Discover the latest developments in the UK labour market through the KPMG and REC, UK Report on Jobs, featuring exclusive data insights from recruitment consultancies, such as Redline Group. This comprehensive report leverages original survey data, providing a monthly overview of labour market dynamics. Here are the key highlights from June’s findings.

Key Findings from the June Report:

• Contract/Temporary billings rose for the first time since October.
• Fastest rise in Permanent salaries for eight months.
• Candidate availability rose.

Overview:

Contract/temporary placements fell during the month of June, a decline attributed to hiring hesitation in hiring pending the result of the general election. The overall economic climate seems to be gradually improving, and the impact of the  new government’s policies on the business landscape remains to be seen.

Candidate Placements and Availability:

Permanent placements declined in June. Recruiters indicated that uncertainty surrounding the general election acted as a brake on recruitment activity. As a result, firms showed a preference for offering temporary contracts, leading to a rise in contract/temp billings for the first time since last October.

Speaking about this, Neil Carberry, REC Chief Executive, said: “Recruiters report companies delayed some permanent hiring decisions during the election campaign. Now a new government has been elected, recruitment firms are looking for that investment to be unlocked. The return of temporary worker demand to positive territory, driven particularly by the Midlands and North, is a sign that the gentle improvement of the last few months is still with us despite the political noise. As policy uncertainty abates, and interest rates drop, we expect permanent hirers to return to the market this summer.”

In June, the availability of candidates to fill roles continued to increase, extending the current period of growth to 16 months. The rate of expansion remained historically marked but was down for a second month running. A combination of redundancies, company restructuring, and a reduced number of job openings led to the rise in staff availability as well.

Engineering Recorded Strong Growth:

June’s survey revealed that six out of ten broad sectors recorded a drop in permanent staff demand. In contrast, there was strong growth for Engineering in both permanent and temp/contract vacancies. Skills shortages in permanent and contract/temp staff were noted for the following specialist areas: Electrical, Mechanical, Electronics design, and Service Engineering, Software Development, along with Front End and Full-stack Developers,  IT Support, and Data Specialists.

Starting Salaries Continued to Rise:

In a bid to attract suitable candidates, amid reports of increased availability, permanent salary inflation accelerated during June. According to the latest data, starting salaries rose to the greatest degree since last October and have now increased for 40 months in a row.

The increase was also linked to a recognition of the ongoing cost of living pressures for workers. Temporary/contract wages also increased, linked to suitable candidates demanding greater wages.

Future Outlook:

Summing up the latest survey results, Jon Holt, Chief Executive and Senior Partner of KPMG in the UK, said:

“There are signs of momentum in the UK's economic outlook with overall inflationary pressure easing and consumer confidence growing as we look towards potential interest rate cuts in the coming months. Our economy is slowly turning a corner and the key task for this new Government is to create a fiscal policy that improves both long-term macroeconomic conditions and creates stability. This will deliver increased confidence for business investment in the UK - accelerating growth, including in the jobs market.”

Redline Group changes lives every day, building world-class teams for technology companies. We continue to be one of the UK’s most trusted Electronics and High Technology recruitment specialists for professional Contract, Permanent, and Executive positions. With four decades of experience our enthusiastic, knowledge-led people create trusted recruitment solutions. Redline is perfectly positioned to offer advice about future-proofing your permanent, contract and interim needs in the technology sector.  

For more information about this month's report, contact Graham Cross on GCross@RedlineGroup.com or call him at 01582 878849.