· News

Recruitment falls as candidates increase at fastest rate since 2020

New plans to reduce immigration could also hinder the labour market next year

Recruitment has decreased during November, according to a report from the Recruitment and Employment Confederation (REC) and professional services network KPMG.

A weak economic outlook and greater caution among employers meant a fall in permanent staff and temporary billings in both public and private sectors, while vacancies also decreased slightly.

London had the steepest reduction of permanent placements, while the Midlands was the only area to see an increase.

The availability of candidates rose at the fastest pace since December 2020, while pay pressures receded.

Claire Warnes, partner for skills and productivity at KPMG said X said this was linked to redundancies and workers concerned over current job security.

She said: "The UK labour market remains tight as we move towards the end of a difficult year for the UK economy. The balance of supply and demand is out of sync. We're seeing more people looking for work, with candidate supply rising and the number of roles available falling.

"Employers are reining in hiring and continuing with redundancies in response to the sustained economic slowdown."


Read more: Vacancies fall as pay growth cools


Starting salary inflation was at its least pronounced since March 2021 and below long term trends, while temporary wages rose at the slowest rate for almost three years.

Warnes added: "Businesses want to plan for the year ahead but the prospect of a faltering UK economy means the certainty they need isn't there. This is now impact salaries as pay inflation isn't as sharp as in previous months."

Neil Carberry, REC chief executive, said although many employers are considering a return to hiring, new goverment plans to reduce immigration are likely to hinder the labour market next year.

The plans include increasing the minimum salary needed for skilled workers to enter the UK from £26,200 to £38,700 and ending companies being able to pay workers 20% less than the going rate for jobs on a shortage occupation list.

Carberry said: "For policy makers, any return to growth will put a strain on a labour market with embedded shortages - this week's pro-election rather than pro-economy decision on immigration will exacerbate that.

"Any return to growth could drive domestically generated inflation unless we adopt a proper plan for workforce capacity, embracing better welfare-to-work support, reforming the apprenticeship levy, funding education properly and supporting school leavers."


Read more: New migration rules will worsen labour shortages