UK hiring increases for first time since September

Kalila Sangster
·4-min read
Group of people. Human Resources. Global network. Diversity.
Increased market activity and COVID-19 vaccine hopes led some companies to press on with hiring plans at the end of 2020, according to a new report. Photo: Getty

UK hiring began to tick upwards in December, with a renewed rise in permanent placements, according to the latest KPMG and REC, UK Report on Jobs survey.

Increased market activity and COVID-19 vaccine hopes led some companies to press on with hiring plans at the end of 2020, the report found.

December saw the first increase in permanent staff appointments since September. Although the growth was only slight, it signals greater confidence among business chiefs as permanent hires are generally seen as a sign of greater employer confidence in their prospects.

Hiring of temporary staff also rose at the sharpest pace for over two years, as companies tended towards short-term staff due to lingering uncertainty around the coronavirus pandemic and Brexit.

Both permanent pay and temp wages rose for the first time since March. However, starting salaries rose only fractionally and the upturn in temp wages was mild overall.

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The number of workers looking for jobs expanded at a softer, but still sharp, rate at the end of 2020. Recruiters said that staff supply rose due to redundancies and worries over current job security in the face of the coronavirus pandemic.

Regionally, permanent placements and temp billings rose in the South of England, the Midlands and the North of England. London, however, recorded a further drop, taking the current period of decline to 12 months.

Vacancies for both permanent and temporary staff in the private sector rose during December. In contrast, demand fell for both permanent and temporary staff in the public sector, with the former experiencing a steeper drop.

IT & computing and nursing, medical and care were the sectors that saw the steepest rates of expansion. Hotel and catering saw the sharpest fall in available job vacancies.

Neil Carberry, chief executive of the REC, said: “The underlying strength of the British economy shone through in the December jobs figures. The biggest expansion in temporary recruitment since October 2018 shows how important the flexible jobs market is to that performance. Growing permanent placements and starting pay also emphasised the resilience of our economy.

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“The important thing now is to maintain as much of that momentum as possible through the new lockdown. With business cashflows under renewed pressure, helping employers protect and create jobs is essential. We need a long-term plan to support businesses across the supply chain – not just those required to close.

This should include wider-spread reductions on business rates, support on VAT repayments and support for self-employed business owners previously cut out of schemes. We need big ticket items now, like a reduction in the cost of furlough and employers national insurance to help firms retain and hire staff in the coming months, alongside delivery of the vaccine.

“Regions have been recovering at different speeds and London continues to lag behind. London is home to some of the most deprived boroughs in the country, so this is particularly worrying. It underlines the urgency of action needed to help businesses retain workers and get the vaccine delivered.”

James Stewart, vice-chair at KPMG, said: “The emergence of a vaccine did bring more confidence to the jobs market in December with a small increase in permanent appointments. Temporary billings were also sharply up across the UK although London was a notable exception.

“However, we will have to see what January brings with a new national lockdown sure to fuel economic uncertainty, alongside preparing and adapting to the new relationship with the EU.

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“But with the UK leading the way on the vaccine roll out and continued government financial support, there is hopefully light at the end of the tunnel for both business and jobseekers.”

The report was compiled by IHS Markit from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.

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