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Report on Jobs: Contract/Temp billings return to growth

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The KPMG and REC, UK Report on Jobs uniquely provides the most comprehensive guide to the labour market, drawing on original survey data provided by recruitment consultancies, such as Redline Group, and employers to provide the first indication each month of labour market trends. Here are the main findings from the October report.


  • Overall candidate availability rose.
  • Temporary/Contract roles saw a fresh rise in billings. 
  • ONS announced 0.2% growth of GDP in August 2023.

September saw a slight decline in permanent hiring with the rate of starting salary inflation edged down to a two-and-a-half-year low. 

During September, recruitment consultancies across the UK noted a softer, but still a decline in permanent staff appointments. Skill shortages also contributed to difficulties in filling vacancies. 

Based on data from the Office for National Statistics (ONS), at 989,000 the number of open roles dropped by 64,000 in the three months to May and slipped below the 1 million mark for the first time in over two years. However, the number of job opportunities was comfortably above that recorded just before the COVID-19 pandemic (826,000 in the three months to February 2020).

After a slight reduction in August, temporary / contract increased at the end of the third quarter, reiterating the preference for short-term staffing solutions and talent shortages in key areas. 

Speaking about this, Neil Carberry, REC Chief Executive, said: “Employers tell us they are feeling better about themselves as the year moves on, and today’s data does suggest the possibility of a turnaround in hiring over the next few months. Permanent placements have been falling for a year now from abnormal post-pandemic highs. While permanent hiring activity continues to slow, fewer firms reported a slowdown last month, leading to a much shallower rate of decline than most months recently. Likewise, temporary hiring remains robust with billings growing marginally in September – as they have most months this year.”

Engineering was among the monitored job categories that registered the second-highest increase in permanent staff demand in September and fourth fourth-highest demand in temporary/contract staff demand. Skills shortages in permanent and contract/temp staff were noted for the following specialist areas: ElectricalMechanicalRF, Hardware, Software, Data Engineers, along with AI Developers, Analysts, Web Designers, CAD, and Cyber Specialists.

Starting Salary Inflation Moderated Slightly:

At the end of the third quarter, the rate of starting salary inflation across the UK continued to moderate. Competition for skilled workers and the high cost of inflation in some areas are attributed to salary inflation. However, the seasonally adjusted Temporary Wages Index pointed to a further rise in average hourly pay for temp/contract staff, albeit at the slowest rate in 31 months. Businesses are still having to offer higher pay to attract and secure candidates with desirable skills. Claire Warnes, Partner, Skills and Productivity at KPMG UK, said: “For several months, strong pay growth has been a consequence of a tight labour market. But strains on employers’ budgets are now affecting the rate of starting salary inflation which is at a two-and-a-half year low, while temporary wages increased at the slowest rate in 31 months.”

The latest data from the ONS showed that employee earnings (including bonuses) increased by +8.5% over the three months to July 2023. Excluding the pandemic period, when rates of pay growth in 2021 were distorted by the furlough scheme and subsequent return to work, this was the quickest rate of expansion on record.

Future Outlook:

The rise of Artificial Intelligence (AI) in all industries has sparked conversations about the role it could play within the recruitment industry. While AI in the recruitment industry could be used for many tasks like crafting content for job postings and interview questions using Generative AI; using Natural Language Processing (NLP) for assessing candidates via video; screening CVs and candidate profiles efficiently using descriptive AI, there are widespread concerns about the technology either being too novel to be used the complete hiring process.

Public attitudes towards AI are also ever-evolving, based on a recent report, nearly two-thirds of respondents expressed concerns about workplaces leaning excessively on AI for recruitment, which highlights a certain unease regarding AI's role in hiring decisions. However, despite these concerns, AI has already made significant inroads in recruitment, with automatic CV screening tools serving as a prime example. Emerging technologies like GenAI now act as assistants, enhancing the efficiency of hiring firms. The landscape of how recruiters employ AI has undergone substantial transformation in recent years, yielding numerous benefits. Notably, AI streamlines processes enhances decision-making, and can mitigate human biases if used sensibly.

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 passionate, 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 David Collins on or call him at 01582 878804.


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