Data reveals a slowdown in hiring in May and June
A recession may become a reality sooner than expected, suggests new data from the Association of Professional Staffing Companies (APSCo). The research reveals difficulties in the UK’s labour market.
Traditionally, June showed a recruitment spike ahead of seasonal drops in July and August. This year, however, although numbers improved slightly in May, the latest research showed a slowdown in hiring between May and June, suggesting further drops in the summer months.
APSCo’s June research suggests that the economy is feeling the effects of Government uncertainty, a cost-of-living crisis, and substantial skills shortages.
According to the report, the number of permanent vacancies added dropped by 12% month-on-month in June, and the number of contract positions fell 11% year-on-year. It appears that permanent roles are on a downhill trajectory, down -2% between June 2021 and June 2022. Contract roles, however, increased 5% in this period.
Compared to pre-pandemic data, the number of permanent jobs being created dropped by 9% between June 2019 and June 2022, suggesting that the stability of the country’s hiring market and the economy is taking strain.
The report also revealed that placements dropped month-on-month for contract (-9%) and permanent roles (-7%). In terms of permanent salaries, the report showed a 2% increase month-on-month, but -3% decline, year-on-year.
Ann Swain, CEO of APSCo, comments: “A slowdown in hiring following the post-pandemic boom was to be expected, but in the current market and with talks of a potential recession in the pipeline, this decline is of concern. The UK’s post-COVID economy has been hit with employment strikes, skills shortages, Government uncertainty and a cost-of-living crisis. With controversial changes to rules around using agency workers during strikes voted in and the country facing continued uncertainty alongside Governmental leadership changes, employers and the recruitment sector have been hit hard. Stability is crucial as we continue to navigate such an ambiguous market. As the trade body for the professional recruitment sector, we believe that there is more to be done to make the UK’s employment sector competitive on a global scale. With recruitment activity slowing, we could be at a tipping point that sets the country on a downward trajectory unless swift action is taken.”