KPMG/REC Report on Jobs
The KPMG/REC Report on Jobs January 2025 is unique in providing the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies and employers to provide the first indication each month of labour market trends.
The main findings for January are:
Fastest decline in temp billings since mid-2020.
The first KPMG/REC Report on Jobs survey of 2025 revealed a further steep drop in permanent placements as falling demand for workers and a general air of business uncertainty weighed on the UK labour market. Extending the current period of contraction to 28 months, January’s survey showed that permanent placements declined at a pace little changed on December’s 16-month record.
There were again reports of a reluctance to hire staff given upcoming changes to the cost of employing staff.
Looking at the data by English region, by far the steepest reduction in permanent placements was seen in the North of England. Rates of contraction nonetheless remained sharp across all three other monitored regions.
Temp billings meanwhile fell to the greatest degree in over four-and-a-half years as the pace of contraction accelerated noticeably since the end of 2024.
Temp billings fell at a steep and accelerated rate in January. Overall, the contraction was the sharpest since June 2020 and latest data marked the seventh successive month in which a decline in temp billings has been registered. Apart from the Midlands, where a fractional increase was recorded, all English regions registered drops in temp billings led by the South of England and London.
Pay inflation weakens at the start of 2025
Another month of rising permanent starting salaries was recorded in January, extending a current run of growth that stretches back to March 2021. However, the rate of salary inflation was relatively modest, and amongst the slowest in the current sequence of rising pay. Whilst some firms were willing to increase starting salaries to attract quality candidates, an excess supply of workers and cost concerns limited inflation. The Midlands recorded the steepest increase in perm starting salaries at the start of 2025, in stark contrast to the marginal reduction seen in the South of England.
Latest survey data showed that temp pay rates rose for a fourth successive month in January, but only marginally and to the softest degree in the current sequence of inflation. Temp pay growth was reportedly limited by high volumes of available candidates and a general lack of market demand. In the South of England, a drop in temp pay rates was recorded, whilst only modest growth was seen in the North of England and London. Solid and accelerated growth was seen in the Midlands. Vacancies continue to tumble.
Vacancies continue to tumble
Demand for staff continued to decline noticeably during January, overall falling to the greatest degree since August 2020. Vacancy numbers fell especially sharply for permanent workers, with the rate of contraction accelerating for the fifth successive month to a near four-and-a-half-year peak.
That said, temp workers also fell at a steeper pace (the sharpest recorded by the survey since June 2020).
Staff availability continues to rise, but to slower degree
Amid widespread reports of a growing volume of redundancies at firms in January – linked in turn to challenging market conditions for businesses – both permanent and temporary staff availability increased. However, the overall rate of growth softened since December to their slowest in just under a year.
Posting 57.7, the seasonally adjusted Total Staff Availability Index was down from December’s 60.6 and at its lowest level since February 2024, though still comfortably above the crucial 50.0 no-change mark. Growth has now been recorded in each month since March 2023.
Source: KPMG & REC Report on Jobs
For many years Glencourt Associates has been one of the selected companies that provides data for these monthly reports. For additional information behind this brief summary, contact Glencourt on 01342 712253.
