Recruitment difficulties persist in South at end of 2024 - report
A new report on recruitment for the south of England does not make cheerful reading for job seekers, as it showed December saw the steepest decline in the region for new, permanent positions in four-and-a-half years.
The KPMG and REC, UK Report on Jobs: South of England is compiled by S&P Global from responses to questionnaires sent to around 150 recruitment and employment consultancies in the region.
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Redundancies led to an oversupply of candidates, driving starting salaries and temp wages down, making the region (of the four monitored) the poorest-performing and the only one to experience a decrease in pay, the report showed.
The downward trend in hiring in the last month of the year was further exacerbated by the Autumn Budget, anecdotal evidence suggested, with some clients reportedly hesitant to recruit due to the proposed changes to employers' labour costs.
The rates of contraction accelerated over the month, signalling significant declines, with the permanent placements seeing the steepest drop in four-and-a-half years.
The report also showed that after November's decline in permanent salaries ended a 44-month period of growth, recruiters in the South of England reported another decrease in December.
The rate at which starting salaries were reduced marked the most substantial drop since February 2021.
An oversaturated market, coupled with decreased business demand were identified as the main factors contributing to reductions in permanent salaries.
But Neil Carberry, chief executive of REC, which represents the recruitment industry, noted that things can change swiftly, and the recruitment sector was worth watching early in 2025.
"Recruitment and employment consultancies in the South of England said redundancies and a decrease in open vacancies were the primary factors contributing to this latest rise in staff supply.
"December is always a hiring low point, and a new year brings new hope – with inflation under control, low unemployment and economic growth expected, the fundamentals are better than many appreciate." he said.
"It is what happens now, as firms return to the market in January, that will decide the path ahead.
"Recruitment is one to watch in early 2025 because it is one of the earliest indicators of a broader economic recovery, with any sign of a turn hugely significant with the sector contributing a massive £44.4bn to the UK economy in 2023."
Meanwhile, Emma Gibson, Reading office senior partner at KPMG UK, added of the survey: "It’s not an easy time for jobseekers in the South of England, with December marking the steepest decline in new, permanent positions in four-and-a-half years.
"That said, despite the ongoing impact of increased tax considerations for employers, we know from our KPMG Private Enterprise Barometer that businesses across the UK have ambitious plans for the year ahead and are confident of growth.
"Salaries in the South also saw the most substantial drop since early 2021 - the only part of the UK to see a fall - so employers in the South will be able to strengthen their teams at a competitive rate," she added.
