Demand for staff in England in November was the weakest in four years as budget tax hikes caused gloom in the jobs market ahead of Christmas, according to a survey of UK employers. born.
KPMG and the Recruitment and Employers Confederation, which published its monthly report on Monday, said the vacancies index fell from 46.1 to 43.9, indicating a decline in job openings. the sharpest drop since August 2020. The survey also showed a sharp decrease in the number of staff positions.
Jon Holt, group managing director and senior partner at KPMG in the UK, said businesses are “having to consider the possibility of increased staff costs” after the Budget increased workers’ national insurance contributions. employers, leading to “a rapid slowdown in hiring activity across the board.” ”.
This survey corroborates other business surveys, including the company’s latest report Bank of Englandof the Decision-Making Council, last week showed that more than half of respondents expected to cut headcount in response to national insurance increases.
Separate data from recruiting site Indeed shows seasonal hiring is even weaker than the overall job market, although many people are looking for short-term work to supplement their income.
Indeed data shows seasonal job postings in the first half of November were 39% lower than last year and 46% lower than the same period in 2019. Total postings were 14% lower than pre-pandemic average.
Economists say low consumer confidence and rising labor costs have reduced demand for seasonal workers, forcing the industry to rethink how it uses temporary workers.
“Consumers are still feeling the pinch from cost-of-living pressures while retailers’ costs rise amid rising wages in the sector,” said Jack Kennedy, senior economist at Indeed. strong growth”.
“While retailers consider the impact of the Budget measures, they will be mindful of protecting their margins,” he added.
Meanwhile, Indeed says more people are looking for seasonal jobs than they were six years ago. Kennedy said this reflects a weaker job market and the continuing impact of rising costs of living.
Kate Shoesmith, deputy chief executive of REC, said pre-Christmas recruitment had been “quiet” after a difficult year for the hospitality and retail industries.
She said employers in sectors where “the biggest expense is staffing” often seek to “maximize the number of people working shifts” so they can ask existing employees to work long hours. rather than hiring temporary employees.
Indeed’s analysis includes hundreds of thousands of job postings in 48 industries, including holiday-related terms like “seasonal” and “Christmas.”
Retail recruitment has slowed, with an average of 57,000 vacancies between August and October, according to official data – down 27%, compared with 78,000 in the same period last year.
Vacancies in the accommodation and food services sector fell by 17% over the same three-month period – from 113,000 in 2023 to 94,000 this year. The total number of vacancies decreased by 14% over the same period.
Harvir Dhillon, economist at the British Retail Consortium, a trade body, said wholesale and retail labor demand had “cooled very significantly,” with weaker consumer demand “a concern.” big concern” for retailers.
“Food inflation remains positive so it will be more difficult for food retailers [choosing between] price increases relative to profit absorption,” he said, adding that non-food retailers “may be dependent on economic conditions and wage growth.”
He added that plans to increase the cost of employers’ national insurance and the national living wage, announced in last month’s Budget, would put “downward pressure on employment intentions”.
Although job posting trends paint a bleak picture across the industry, some of the UK’s biggest supermarket chains are recruiting similar numbers of temporary workers in stores, warehouses and fulfillment centers online orders compared to last year.
For example, Tesco said in October that it would look to hire 26,000 staff, compared with 30,000 in 2023; Sainsbury’s aims to employ 20,000 people, compared with 22,000; and higher-end chain Marks and Spencer is recruiting 1,000 more staff compared to last year’s 10,000.
Kate Nicholls, chief executive of trade body Hotels UK, said bookings over the festive period were similar to previous years. However, she added, there has been a shift away from longer-term temporary contracts in the sector.
She said: “We are seeing higher levels of job security, more permanent contracts but also more flexibility, which means you don’t see as many ads for jobs around Christmas as before”.
Additional reporting by Laura Onita.
