With the new statistics from the Association of Professional Staffing Companies (APSCo) demonstrating challenges in the UK labour market, it appears likely that a recession will materialise, probably sooner than predicted.
In May, the Office for National Statistics (ONS) reported small signs of economic growth following several months of contraction.
However, APSCo’s June research indicates that the economy is experiencing the effects of government uncertainty, a cost-of-living crisis, and significant skills shortages.
Bullhorn, the global leader in software for the employment business, has published statistics indicating a decrease in hiring between May and June.
With May being a slower month for hiring owing to the bank holidays, a decline from May to June shows hiring is on a downward trajectory leading up to the summer months, defying the typical pattern of June recruitment peaks and seasonal declines in July/August.
The number of permanent jobs added in June decreased by 12% month-over-month, while contract roles decreased by 11%.
Permanent employment is on a downward trend, decreasing by 2% between June 2021 and June 2022, whilst contract roles climbed by 5% over the same time.
Comparing the number of permanent roles generated between June 2019 and June 2022 to the number of permanent jobs established before to the pandemic paints a concerning picture. The number of permanent jobs created will decline by 9 percent between June 2019 and June 2022.
This indicates that the stability of the nation’s employment market, and consequently the economy, is beginning to deteriorate.
Both contract and permanent placements decreased month-over-month by 9 percent and 7 percent, respectively. Although permanent salaries recorded a 2% gain month-over-month, the 3% yearly drop is concerning in light of the UK’s cost-of-living crisis and growing energy costs.
Ann Swain, CEO of APSCo said: “A slow-down in hiring following the post-pandemic boom was to be expected, but in the current market and with talks of a potential recession in the pipeline, this decline is of concern.
“The UK’s post-Covid economy has been hit with employment strikes, skills shortages, Government uncertainty and a cost-of-living crisis.
“With controversial changes to rules around using agency workers during strikes voted in and the country facing continued uncertainty alongside Governmental leadership changes, employers and the recruitment sector have been hit hard.
“Stability is crucial as we continue to navigate such an ambiguous market. As the trade body for the professional recruitment sector, we believe that there is more to be done to make the UK’s employment sector competitive on a global scale.
“With recruitment activity slowing, we could be at a tipping point that sets the country on a downward trajectory unless swift action is taken.”