UK Firms Slow Down Hiring As Economic Crisis Creates Uncertainty

credit: businessinsider

UK (Parliament Politic Magazine) – British businesses are experiencing a slowdown in hiring, coinciding with a surge in the number of individuals seeking employment. This trend is indicative of the prevailing “lingering uncertainty” surrounding the economic outlook, as revealed by recent data.

In June, the availability of candidates for new job positions witnessed a significant increase, marking the sharpest rise since the peak of the UK’s coronavirus restrictions in December 2020. These findings were unveiled in the latest report on jobs, jointly conducted by the Recruitment and Employment Confederation (REC) and KPMG.

Uncertain Economic Situation Raises Concerns For UK Business Sector

The aforementioned data highlights a concerning scenario for British businesses, as they grapple with the challenges posed by the uncertain economic climate. This slowdown in hiring, coupled with a surge in job seekers, underscores the cautious approach adopted by companies in the face of ongoing uncertainties.

The recruitment agencies experienced a decline in the number of individuals being placed in permanent positions, while wage growth reached its lowest point in over two years in June. This comes ahead of the release of UK labor market data on Tuesday, which economists predict will indicate that unemployment remains at a steady 3.8%, a level close to the lowest in four decades. Nevertheless, economists are closely monitoring the data for any indications of a slowdown in growth.

The Bank of England has swiftly increased interest rates from 0.1% in late 2021 to 5%. Financial markets have already factored in additional hikes in the upcoming months as the Bank endeavors to combat persistently high inflation.

Slowdown In recruitment Has Resulted In Increased Job Losses

Claire Warnes, a partner at KPMG UK, expressed her concern about the recent surge in candidate availability, which is the highest it has been in two and a half years. This increase is indicative of the ongoing slowdown in recruitment and the growing number of job losses across various sectors, posing a significant threat to the economy.

Warnes also noted that employers seem to be favoring temporary hiring rather than offering permanent positions due to the prevailing economic uncertainty.

Neil Carberry, the chief executive of the REC, whose members were surveyed, suggested that the rise in inflation and the increasing number of job losses may be prompting more individuals to seek new employment opportunities. Consequently, it comes as no surprise that the rate at which wages are increasing has once again declined.

Overall, these developments highlight the challenges faced by the job market and the need for careful consideration and strategic planning to address the current economic situation.

Labor Market Remains Tight Despite The Trend

Nevertheless, Carberry acknowledged that the situation was far from straightforward, given the persistently low unemployment rate. “Despite these prevailing trends, the labor market continues to grapple with significant challenges. A dearth of skilled workers remains a pressing issue, particularly in sectors such as accountancy, construction, teaching, and nursing, where the recruitment and retention of employees have become increasingly arduous.

The surge in job vacancies for both temporary and permanent positions within the hospitality and catering industry, as well as in blue-collar occupations, coupled with the growing demand for temporary roles in the retail sector, suggests that businesses maintain a positive outlook on consumers’ willingness to spend their hard-earned wages on goods and services. This is particularly noteworthy considering the decline in purchasing power and the overarching cost of living crisis.

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Cost Of Living Crisis Adds Pressure On Economic State

The current cost of living crisis has intensified the financial strain on households, further impacting their spending power. Rest Less, a reputable provider of job listings and guidance for individuals over the age of 50, has revealed that this economic setback has led to an increase in the number of women considering working beyond retirement age.

Through a comprehensive analysis of UK government statistics, Rest Less discovered that a significant 44% of women aged between 50 and 65 have expressed their intention to either remain employed on their current schedule or reduce their working hours.

Stuart Lewis, the esteemed chief executive of Rest Less, emphasized the significance of this finding by stating, “An astounding number of women aged 50-65 have expressed their plans to continue working in some capacity even after reaching the state pension age. It is highly likely that this figure has risen even further due to the subsequent cost of living crisis.”

Beth Malcolm

Beth Malcolm is Scottish based Journalist at Heriot-Watt University studying French and British Sign Language. She is originally from the north west of England but is living in Edinburgh to complete her studies.