UK: downturn in recruitment activity eases in June

The latest KPMG and REC, UK Report on Jobs survey indicated a further drop in hiring activity during June as clients continued to freeze or cut back on their recruitment plans due to the coronavirus disease 2019 (COVID-19) pandemic. That said, both permanent placements and temp billings fell at notably softer rates than in April and May. Demand for staff also fell at a weaker, albeit still marked, rate. However, redundancies and furloughed workers led to the steepest increase in labour supply since January 2009, with temp candidate numbers rising at a record pace. This, combined with subdued demand for staff, added further downward pressure on pay. The report is compiled by IHS Markit from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.

Recruitment consultancies signalled a softer decline in hiring activity at the end of the second quarter. Permanent staff placements and temporary billings both fell at notably weaker rates than in April and May when the COVID-19 pandemic was at its most severe. That said, rates of contraction remained sharp amid reports that clients continued to either pause or cancel recruitment plans.

The availability of workers rose at the quickest rate  since January 2009 in June. There were widespread reports of staff supply increasing due to redundancies and workers who were on furlough and seeking new roles. Substantial increases were signalled for both permanent and temporary staff numbers, with the latter rising at the quickest rate in the survey's 23-year history.

Starting pay for both permanent and short-term staff fell further in June as demand for workers remained weak and labour supply continued to increase. Though not as severe as in May, rates of reduction remained sharp for both starting salaries and temp wages