Redundancies and scant vacancies weakens jobs market
A fall in the number of vacancies and growth in the jobseekers pool due to more redundancies has led to a further decline in the jobs market, a leading survey has indicated.
Official data this week showed a jump in the unemployment rate from 4.8 per cent to five per cent in a set of worrying news for both businesses and workers.
Now fresh survey results have pointed to a further contraction in the jobs market at the start of the third quarter.
Analysis conducted by KPMG and the Recruitment and Employment (REC) of leading S&P Global research has suggested that vacancies fell sharply over October.
The number of people seeking new roles also rose at a sharp rate in October, with the increase in candidates “among the steepest seen since late 2020”, according to researchers.
The surge in permanent and temporary staff availability was linked to redundancies and fewer job opportunities, analysts at REC and KPMG.
Hiring also continued to drop as the permanent placements index came in below the 50-figure mark for neutrality at 45.2, a slight rise from September and August.
Neil Carberry, REC chief executive, struck a more positive tone when commenting on the results as he said the jobs market appeared to be more “stable” given some growth in temporary hiring and slightly better readings on permanent hiring levels.
He said recruiters were not “exuberant” but there was some cause for optimism ahead of a difficult Budget for the Chancellor.
“We can hope that the long period of retrenchment we saw last into the summer, is starting to ebb away,” Carberry said. “But we have been here before. There was a similar mood in the jobs market before the Chancellor’s Halloween Budget last year.
“The huge surprise increase in payroll taxes then shocked the market and we have seen the results of that, as businesses predicted then, in higher unemployment and redundancy. As we go into Budget 2025, there can be no repeat.”
Jobs market struggles
The survey also showed that there was a marginal rise in starting salaries though there had been a decline in temporary wages, signalling “broadly stagnant pay for short-term workers”.
In London-specific data, the survey showed that there was a “solid decline” in permanent placements in the seventh consecutive monthly decline.
The capital city suffered the least out of any region in the UK. It was also the area in England with the second fastest growth in expansion of supply for permanent placements, otherwise the number of vacancies.
Redundancies over the month also increased the number of jobseekers at a faster rate than in September.