A recent survey conducted by the UK's Recruitment and Employment Confederation (REC) in partnership with KPMG, the global quant giant, reveals a concerning trend in the UK job market.

British employers have significantly reduced the hiring of new permanent staff through recruitment agencies, marking the steepest decline since mid-2020. This cautious approach is attributed to growing concerns about the country's economic outlook.

The survey's key indicator of permanent staff hiring plummeted to 43.4 in July, the lowest level recorded since June 2020, indicating a challenging job market for seekers. Additionally, the measure of temporary staff hiring also showed weak growth, reaching the lowest point in nine months for the same period.

Neil Carberry, the chief executive of REC, cited economic uncertainty as the main catalyst behind the current challenges in the job market. The prevailing uncertainties are causing employers to adopt a more cautious stance when it comes to hiring new permanent staff.

In conjunction with the REC's survey, a separate study conducted by the UK BDO highlighted the impact of rising interest rates, challenging trading conditions, and weak demand on hiring intentions and business confidence across the services and manufacturing sectors. The BDO's employment gauge broke a five-week uptrend in July, indicating a slowdown in hiring activities. Moreover, the optimism inflation index registered the first monthly loss in four months during the same period, indicating reduced confidence among businesses.

These surveys collectively indicate a cautious and uncertain employment landscape in the UK, which has led to a decline in hiring rates for permanent positions and a slowdown in wage growth. The economic uncertainties are shaping employer decisions, making them more hesitant to increase their workforce and invest in new talent. Photo by Phil Whitehouse, Wikimedia commons.