June 2024 UK Labour Market Report: Job Market on its Way Back

Explore the latest developments in the UK labour market through the KPMG and REC, UK Report on Jobs, featuring exclusive 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 May’s findings.

Key Findings from the June Report:

• Slowest Decline in Placements since March 2023.
• Starting pay rose again in May.
• Stable demand for Contract/Temp staff

Overview

May saw the softest fall in placements in over a year. Despite these statistics, demand in the Engineering sector continues to show robust growth, leading all surveyed sectors in the increase of both permanent and contract roles.

Lack of Suitable Candidates

Permanent placements made by UK recruitment consultants fell again in May, but the contraction rate was modest and the slowest in over a year. The survey highlighted fewer job openings and evidence of delayed hiring decisions. Panellists continued to report a lack of suitable candidates for available positions.

The seasonally adjusted Temp Billings Index remained below the crucial 50.0 no-change mark for a seventh successive month in May, indicating a slow and modest fall in contract/temp billings. This decline was attributed to a combination of reduced demand and shortages of candidate for specific roles.

Speaking about this, Neil Carberry, REC Chief Executive, said: “The jobs market looks like it’s on its way back, with clear improvements over last month on most key measures, especially in the North and Midlands. While permanent hiring remains weak, these are the best numbers we have seen in more than a year, and the contract/temp billings number has also improved.”

Demand within Engineering sector grows:

According to the official statistics body, at 898,000, vacancies are lower compared to a year ago but remain significantly higher than just prior to the start of the pandemic in March 2020 (796,000).

Of the ten broad sectors covered by the survey in May, just three recorded growth. The strongest increase was seen for Engineering, in both permanent and temporary/contract staff demand. Skills shortages in permanent and contract/temp staff were noted for the following specialist areas: Electrical, Mechanical, RF, Marine, Software Development, and Service Engineering, along with Developers, JAVA, IT Support, and Data Specialists.

Pay Growth Remains Steady:

Panellists linked the wage increase in both permanent and temp/contracts during May to broader inflationary pressures and the high cost of living. Some panellists noted that salaries were being raised in response to April’s increase in the national minimum wage. Neil Carberry, REC Chief Executive, said: “Pay growth remains steady, reflecting both settlements made by employers for their staff, but also the substantial National Minimum Wage rise in April.”

Future Outlook:

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

“We know our labour market is resilient. The big picture is that unemployment is historically low with the ease of filling vacancies back to pre-pandemic levels. Taken together with today’s data and expected interest rate cuts, inflation easing and increased consumer confidence over the summer, we will hopefully move towards a better economic outlook for the second half of 2024.”

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.