According to a new IHS Markit Report on Jobs, July saw permanent contracts plummet by the sharpest rate since May 2009.
The report, which collected data from 400 UK recruitment and employment firms found that:
- Permanent appointments decreased amid heightened uncertainty
- Temporary billings increased, but at the slowest rate in ten months
- Permanent salaries increased at the weakest rate in over three years
32% of recruiters placed fewer people in June, this rose to 38% in July. It is thought that this decline is a result of an unstable market and companies being unwilling to commit to permanent contracts until the full impacts of the Brexit are known. Those worst affected are agencies in London.
Despite the above results, the IHS Markit Report also revealed that demand for staff remains high, suggesting that businesses are simply holding off committing to new permanent positions and seeking short-term staffing solutions instead.
In regards to salaries, these are continuing to increase for both temporary and permanent workers, albeit at a slower pace.
Kevin Green, the CEO of the Recruitment and Employment Confederation (REC), which sponsored the survey, declared, “The truth is we don’t know what long term consequences the referendum result will have on UK jobs. With the political situation becoming more stable and the Bank of England making sensible decisions, we may well see confidence return to the jobs market more quickly than anticipated.”
In the run up to the referendum, professional hiring appeared to flat line (according to the Office for National Statistics (ONS) UK Labour Market Report June 2016 – read our article here). It was thought that pre-Brexit fear had inhibited recruitment, yet with the ONS report for July revealing a 0.2% increase in the employment rate; it now appears that the recruitment market has stabilised.
These latest results by ONS and IHS Markit reveal that the recruitment market has not been significantly impacted by the decision to leave the EU. Instead, the market has taken another direction.
It is still too early to gauge the full impact of the Brexit on recruitment. It appears the market is cautious, but has not been significantly affected as of yet. It will be a while before the long-term effects are known, but as the UK economy stabilises, confidence in the recruitment market is expected to increase.
- HIS Markit: https://www.markiteconomics.com/Survey/PressRelease.mvc/c42416a2edcc428a9f143ad257ac3751
- ONS: http://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/july2016
- CIPD: http://www.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2016/08/05/employers-opt-for-temporary-staff-as-permanent-recruitment-plummets.aspx