Vacancies fall as demand for staff drops

The latest report on jobs by KPMG and the Recruitment and Employment Confederation, which surveyed 400 recruiters in December, showed the number of vacancies rose by the slowest pace since February 2021 as companies paused recruiting to cut back on costs.

The monthly index of vacancies fell slightly in December to 53.0, down from 54.1 in November. 

Wages continued to rise in response to inflation, but pay growth fell to its slowest level since the summer of 2021, according to the survey.

The number of staff hired for permanent roles fell for the third consecutive month in December 2022, while temporary roles rose, though the rate of growth was still modest.

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Companies have been moving to minimise commitments as economic uncertainty continues to spook employers. However, the report did note that demand for permanent placement always declines in December.

Demand for temporary staff had the slowest upturn in the executive and professional sector, while the sectors which saw the biggest rises in demand for permanent staff were the nursing/care/ medical sector, followed by hotel and catering.

Construction saw the quickest drop in vacancies. The sector contracted in December as housebuilders took on fewer projects.

The report also noted that candidate availability dropped due to less people seeking new roles in the current climate.

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Neil Carberry, chief executive of the REC, said: “People telling recruiters that they are increasingly anxious about moving jobs is a concern in this regard, as a move is a great way to boost pay and build up skills.

“If people are less willing to move jobs, this could make shortages worse in the near term. That is why a stable economy, and support to address labour and skills shortages – from welfare to work support to immigration and skills reform – need to be major priorities for the UK government.”

He added: “Overall activity levels remain high, with vacancies and starting rates of pay still growing. There is also plenty of demand for temporary workers, which is less affected by employers’ long-term confidence.

“The overall picture is still of a robust labour market, although contraction in sectors such as construction is a particular concern given its significance to the health of the economy.”