UK Recruiters warn Bank of England of permanent hiring dip due to economic uncertainty

UK recruiters have warned the Bank of England of a dip in permanent hiring across UK businesses as organisations grapple with ongoing economic turbulence, according to a new report.

KPMG and the Recruitment and Employment Confederation (REC) collected data on the state of the UK jobs market for their latest UK Report on Jobs, observing a decline in the hiring landscape during November.

The REC attributed the dip to economic uncertainty and hesitancy to commit.

The report highlighted a growing disparity between the availability of new job candidates, increasing at the fastest rate since December 2020, and the number of permanent staff hires, which has fallen at the second fastest rate post-pandemic.

It was also found that London saw the sharpest decline in permanent hires across the UK.

Derek Mackenzie, CEO of Investigo, part of The IN Group, commented: “As we approach the new year, bimodal planning has become a popular trend for businesses to navigate economic uncertainty, balancing short-term plans with longer-term business strategies. Pressing business challenges such as generative AI won’t wait for the economy, so it’s important that organisations invest in staff to oversee its development in order to secure their long-term business health.”

Sectors such as technology are already facing a shortage of skills, and when it comes to staff, organisations need digital recruits that can help boost efficiencies, stay on top of emerging trends in areas such as gen AI and data, and ultimately generate revenue for the business.

There are a number of different ways for businesses to hire digitally skilled staff without breaking the bank such as flexible contracts or hiring at an entry-level, but it’s important that organisations invest in people regardless of the economic situation. Unlocking the potential of people through their unique skillsets is key to success” he added.

Despite competition for skilled workers, budgetary pressures due to the economy meant that starting salaries and temporary pay saw slower rises compared to previous months.

The news comes ahead of the Bank of England’s decision on interest rates on December 14. The Bank is expected to keep interest rates unchanged at 5.25 per cent.