Salary inflation at the slowest rate since 2021

This is one of the key findings in the latest Report on Jobs published by the Recruitment and Employment Confederation (REC) and KPMG.

Ongoing economic uncertainty and hesitancy to commit to new hires amid cost pressures led to a further marked fall in permanent placements, the report notes, while temp billings dropped at the steepest rate since mid-2020.

With uncertainty over the economic outlook leading employers to often delay or freeze hiring decisions, the number of people placed into permanent jobs across the UK continued to decline markedly midway through the first quarter (Q1) of 2024.

The availability of staff rose for the 12th straight month in February amid reports of redundancies and a slowdown in hiring activity.

REC Chief Executive, Neil Carberry, said: “The temporary labour market is the unsung hero of the economic uncertainty of recent years. It keeps the cogs of the economy turning amidst uncertainty and labour shortages — but it still needs nurturing. As we approach the General Election, businesses will be looking to politicians for commitment on this, and reforms of regulation that will support it from IR35, to regulating of the umbrella market and delivering flexibility to the Apprenticeship Levy.”

The retail and construction sectors led the downturn in demand for temporary workers. Of the 10 surveyed job categories, only blue-collar and engineering noted increases in demand for short-term staff during February.

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