UK firms shun full-time staff as temp hiring nears two-year high

Tom Belger
·Finance and policy reporter
·2-min read
Commuters at Clapham Junction station as train services increased as part of the easing of coronavirus lockdown restrictions, in London, Monday May 18, 2020.Britain's Prime Minister Boris Johnson announced last Sunday that people could return to work if they could not work from home. (Yui Mok/PA via AP)
Temp hiring has risen as permanent hiring has declined. Photo: Yui Mok/PA via AP

UK employers are taking on fewer permanent staff as the coronavirus crisis deepens, with the bleak economic outlook instead fuelling a surge in temp staff hiring.

New figures suggest demand for temporary workers hit its highest level last month since December 2018, with employers looking to expand but reluctant to commit to longer-term employment. It marked the third month in a row of temporary recruitment expanding.

A survey of 400 recruitment and employment consultancies across the UK shows a “modest” decline in overall demand for staff in October, when September had seen hiring grow.

It provides the latest in a string of data showing the UK economy’s summer recovery fading even before England’s new lockdown, as tighter national and regional restrictions and soaring cases dampened activity. The economy is expected to take a heavy blow from England’s lockdown curbs imposed on Thursday, forcing closures of “non-essential” retail, leisure and eat-in or drink-in hospitality venues.

The decline was driven by a continued decline in permanent staff appointments in six of the 10 sectors covered by the survey, with the greatest falls in retail, hotels and catering.

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“Greater uncertainty over the outlook amid rising COVID-19 cases weighed on hiring activity, with firms often preferring to recruit short-term staff,” said the report by the Recruitment & Employment Confederation (REC) trade body and consultancy KPMG on Thursday.

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Meanwhile the number of workers signing up with agencies “continued to expand sharply” in October, as unemployment continues to grow. “The availability of both permanent and temporary staff continued to rise at historically marked rates amid widespread reports of redundancies as well as concerns around job security,” the authors wrote.

Recruiters said higher applicant numbers and clients’ lower budgets continued to push down pay levels, with permanent and staff salaries falling “markedly” and faster than the previous month.

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“October brought a dose of realism after a quick economic bounce in the summer. While a new England-wide lockdown starts this week, similar restrictions were already in force in much of the UK last month,” said Neil Carberry, chief executive of the REC.

“These figures show that hiring was still going on – and we believe that firms are better prepared to trade through these new restrictions than they were in March.

“Nevertheless, the outlook remains uncertain, and concerning. We face a challenging winter and temporary work will be a vital tool for keeping businesses going and people in work.”

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