Job market continues to slide as employers remain cautious over the economy

08/01/2024

THE UK job market continued to slide to end 2023 as economic uncertainty continued to dent business confidence, according to KPMG and REC’s latest Report on Jobs.

Vacancies fell for the third in four months in December despite the supply of candidates continuing to ‘rise sharply’.

Recruiters cited that reduced hiring levels and a spike in redundancies had widened the pool of candidates for both full-time and part-time roles. However, overall starting pay rose in December due to the demand for skilled workers.

Responding to the findings, Derek Mackenzie, CEO of Investigo, part of The IN Group, commented: “As we enter 2024, businesses must turn to skilled staff to boost organisational productivity and drive overall business growth despite the uncertain economy. Using the technology sector as an example, the sharp rise in AI adoption in 2023 didn’t wait for the economy and businesses must be equipped to harness the next innovation as part of their digital transformation journey.”

“It’s positive to see the supply of staff remain high, but the challenge now is for businesses to bring them on board in the right roles, provide training and maximise their skillsets. Hiring through means such as flexible contracts or entry-level positions can be a cost-effective way of onboarding new tech talent, while training schemes to promote upskilling and reskilling can help existing staff fill senior roles. Organisations must continue to focus on people despite economic turbulence, unlocking their skillsets and empowering them to lead growth” he continued.

The four monitored UK regions by KPMG and REC all reported a decline in permanent staff appointments with the Midlands seeing the sharpest fall.

Despite the dip, it was found that permanent placements and temp billings fell at softer rates than in November.


Sjuul van der Leeuw, CEO of Deployteq, part of Inspired Thinking Group: “Tech skills must remain central across all industries in 2024 so it is important that businesses find a solution to stop the job market slide and go for growth this year. In a sector such as marketing technology, innovations are continuing at a rapid pace and businesses and agencies need access to highly skilled tech staff to support the creative vision of brands. 

Whether it’s managing generative AI content creation or data-driven marketing campaigns, organisations need to find a way to prioritise investment in staff to recruit and train a skilled workforce that can lead innovation for both the business and the wider industry.”

The survey also found that employers’ budgets remained under great pressure due to economic uncertainty, despite competition for qualified staff driving up overall starting pay.

Commenting on the latest survey results, Justine Andrew, Partner and Head of Education, Skills and Productivity at KPMG UK, said: “It’s a muted end to the year for the labour market, which despite some loosening during 2023, continues to be tight. While the data for December shows hiring activity for both permanent and temporary roles fell at a softer rate than the previous month, businesses are still making redundancies and pausing hiring due to a lacklustre economic outlook. This has driven a further decline in permanent job opportunities, while we continue to see a rising number of people looking for new work.”

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