Rising redundancies and heightened employment insecurity drove a sharp increase in UK job seekers in August despite the permanent hiring market showing its first signs of recovery in nearly four years.
Total staff availability rose at its fastest rate in three months as Brits hunting for roles flooded the market. This influx was triggered by ongoing corporate layoffs and growing anxiety over current employment security, according to the latest employment report from KPMG and recruiter REC.
Permanent job placements managed a marginal uptick with the index reading 50.5 – breaking above the neutral 50.0 mark to indicate growth in permanent hiring for the first time since September 2022.
Temporary billings expanded to 52.4, as cautious employers prioritised flexible, short-term contracts over long-term headcount.
“This is clearly encouraging after such a prolonged downturn in hiring, but the jobs market continues to contract overall,” Jon Holt, group chief executive and UK senior partner at KPMG, said.
He added with the first Budget for Andy Burnham and Chancellor John Healey set for next month, the government has an “opportunity to turn these green shoots into sustained positive momentum”.
Burnham warned not to take the jobs market for granted
Maxine Bligh, interim chief executive of REC, said: “This is not the time to take the job market for granted. Instead, government should follow through on its commitment to lessen burdens on business.”
Despite the lift in permanent placements, overall demand for workers fell for the 34th consecutive month, sending nationwide ONS vacancies down to 707,000, the lowest non-pandemic level since November 2014.
Retail and hospitality suffered the steepest declines in job openings, whilst public sector labour demand contracted across both permanent and temporary roles.
Bligh said improving momentum across the jobs market meant “greater pragmatism on the employment rights agenda, including lessening the gamble the government is taking with its guaranteed hours policy”.
“It also means delivering an Autumn Budget that demonstrates the government is serious about backing business and provides employers with the confidence they need to hire, invest and grow,” she added.