A recent report shows that economic uncertainty caused permanent staff appointments to fall sharply last month, while temp billings saw a marked increase in demand.
The latest KPMG and REC UK Report on Jobs surveyrevealed that the drop in permanent demand was driven by the reintroduction of national lockdown measures amid a rise in Covid-19 cases.
The report also found that January saw both starting salaries and temporary wages fall after increasing in December. However, the rates of reduction were mild compared to those seen in 2020.
Neil Carberry, Chief Executive of the REC, said, “Economic uncertainty is weighing on employers’ minds even where they see potential for their own firm to grow, so it’s no surprise that temporary work is leading the jobs recovery. This emphasises again how important flexible forms of work are to helping businesses and public services react to the pandemic. Temporary work is also helping people get back into jobs more quickly after the recent spike in redundancy numbers.
“With the vaccination programme making progress, it’s likely that a path out of the pandemic is emerging. As that happens, we expect a strong recovery in permanent hiring. But businesses need government help to bridge these last few months. Support for strained corporate cash flows is key. Extending furlough and reducing its cost to firms, supporting family business directors left out of support packages so far, and putting back repayments of deferred VAT and CBILs loans until the recovery would all help enormously.”
James Stewart, Vice Chair at KPMG, added, “The latest national lockdown has knocked business confidence, evident by a renewed drop in permanent appointments as businesses put recruitment on hold.
“However, there is cause for optimism as businesses carefully monitor the vaccine rollout and look forward to the Budget next month. It gives the Government the opportunity to further help the recovery in jobs and revive the UK’s productivity growth.”
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