KPMG – UK Jobs Report June

UK Job Market Update: Navigating a Changing Landscape

The current UK labour market is experiencing notable shifts, presenting both challenges and opportunities for businesses and job seekers alike.

Key Trends:

• Growing Talent Pool: We’re seeing a rapid increase in the supply of available workers, reaching levels not seen since late 2020. This surge is largely attributed to reports of redundancies and a general slowdown in recruitment, creating a broader and more competitive talent pool.
• Hiring Slowdown: Both permanent job placements and temporary contract billings are declining sharply. Businesses, especially in the South of England, are exercising caution and holding back on recruitment due to ongoing economic uncertainty and efforts to reduce costs. The South of England has seen the steepest decline in permanent hires compared to other monitored regions.
• Slowing Pay Growth: With increased competition for roles and reduced demand from employers, the upward pressure on wages is easing, leading to a slowdown in pay growth.

What This Means for Businesses:

• Opportunity for Strategic Hiring: While the market is cautious, the expanded talent pool offers a prime opportunity for businesses with the resources to invest in key hires. Securing the right talent now could be crucial for future resilience and growth as economic conditions stabilize.
• Cautious Approach: Many employers are taking a “wait and see” approach, prioritizing cost reduction and pausing major hiring decisions until there’s greater clarity on the economic outlook.

Industry Insights:

Experts like Steve Hickman from KPMG UK highlight that this period reflects unusually high levels of uncertainty rather than a sudden economic downturn. Neil Carberry, REC Chief Executive, emphasizes the need for clarity and transparency from the government to build business trust and drive recovery, particularly concerning the roadmap for the Employment Rights Bill.

Looking Ahead:

Despite the current cooling, the underlying fundamentals of the UK economy are considered better than widely appreciated. As economic conditions begin to stabilize, we could see hiring activity pick up, driven by the need for businesses to future-proof their workforces and diversify talent pipelines.