Employers are taking a ‘wait and see’ approach to new job hiring while temporary contracts are drying up, even in the accountancy sector
The latest KPMG REC jobs report for January shows a sharp fall in the number of employers hiring staff, with vacancies falling at the steepest rate since the height of job losses during the pandemic in August 2020.
No sector was safe from the aftershocks of the Budget, with each one seeing sharp drops in vacancies across both permanent and temporary positions in January. The number of permanent positions available was slightly better last month, but temporary positions fell rapidly in January.
The accounting and financial sector vacancies were down to 44 on the permanent vacancies index for permanent positions, while temporary positions fell to 41.
However, the accounting and financial sector is most is the category experiencing the most skill shortages, with 21 roles in short supply, including accountants, auditors, bookkeepers credit controllers, and financial controllers.
The worst hit sector was the executive and professional category, down to 37 on the index, followed by the secretarial, retail, and IT categories.
Neil Carberry, REC chief executive, said: ‘Businesses entered the year uncertain on the growth path, and that has driven a “wait and see” approach to hiring. Around the country, REC members report that clients have plans and are hopeful for the year ahead - but firms are slowing investment until they see more momentum in the economy.
‘But it takes time, and real action, to build business confidence. An autumn of fiscal gloom, difficulty navigating significant upcoming tax rises and little progress on the practicalities of a costly new approach to employment rights are all acting as brakes on progress.’
The survey for January also found that staff availability slowed in January but still rose compared to December 2024, while temporary staff availability increased sharply, increasing the constant rise in these number to 23 months.
Despite negative statistics the REC stressed that although ‘demand for workers has declined, it hasn’t disappeared’, but current economic conditions affect business confidence and ‘plays a crucial role in shaping the strategies that drive growth and success’.
Jon Holt, group chief executive at KPMG said: 'Businesses continue to hold back on recruitment, leading to permanent and temporary placements falling steeply again in January.
‘While firms are still willing to pay for top talent, increased staff availability weighed on pay growth. This cooling may have encouraged the Bank of England’s decision to cut rates last week.’
The negative trend is not expected to continue throughout 2025 though, with the REC predicting economic conditions will improve with growth of 2.7% this year, increasing to 3.2% in 2026, and 3.5% in 2027.
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Peninsula Team, Peninsula Team
(Last updated )
Peninsula Team, Peninsula Team
(Last updated )
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