KPMG/REC Report on Jobs – March 2025
The “Report on Jobs” is unique in providing the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies, including Glencourt Associates and employers to provide the first indication each month of labour market trends.
The main findings for March are:
Hiring activity declines again in March
UK recruitment consultancies signalled a further reduction in hiring activity in March. Panel members frequently mentioned that economic uncertainty, tighter recruitment budgets and reduced client activity had weighed on staff hiring.
The seasonally adjusted Permanent Placements Index posted below the neutral 50.0 level in March, to signal a fall in permanent staff appointments across the UK. This extended the current sequence of contraction to two-and-a-half years. The rate of reduction was little-changed from that seen in February and therefore sharp overall.
Where lower placements were recorded, panellists often linked this to fewer job opportunities and reduced confidence around the economic outlook. Three of the four monitored English regions signalled a reduction in permanent placements, with the steepest fall in the North of England. London bucked the wider trend and recorded a renewed, albeit modest, expansion.
Recruitment consultancies across the UK signalled a decline in temp billings for the ninth successive month in March. Though solid, the rate of contraction was the softest in 2025 to date. There were frequent reports that lower demand for staff amid reduced client activity and tighter hiring budgets had weighed on billings. There were also reports that some temp workers had moved to permanent positions.
Although demand for staff continued to decline sharply in March, the pace of contraction eased further from January’s recent record. At 44.2, the respective seasonally adjusted index rose from 41.8 in February to therefore hit its highest level in five months.
Demand for permanent staff fell for the nineteenth month in a row in March. The rate of decline was the softest seen since last October. Sector data indicated that demand for workers fell more sharply in the public sector than the private sector during March. The quickest decline in vacancies was signalled for permanent positions in the public sector.
Temporary vacancies meanwhile fell at a rate that, though solid, was the slowest since last December.
Supply of labour rises at fastest pace in over four years
The availability of staff increased sharply in March, with the rate of growth the quickest seen since December 2020. Recruiters noted steeper upturns in both permanent and temporary labour supply, with the former registering the sharper rate of expansion.
The latest survey signalled a sharp and accelerated rise in the availability of candidates at the end of the first quarter. The seasonally adjusted Total Staff Availability Index rose from 59.2 in February to 63.0, indicating the most pronounced upturn since December 2020. Overall candidate supply has now increased in each of the past 25 months.
The supply of workers to fill permanent positions increased again in March, thereby stretching the current period of expansion to 25 months. Notably, the rate of growth picked up to the sharpest since the end of 2020. Nearly four times as many recruiters (40%) noted an improvement in permanent candidate numbers compared to those that saw a decline (11%).
Vacancies fall at softer, but still marked rate
Overall demand for staff continued to weaken at the end of the first quarter, with the respective seasonally adjusted index posting in contraction territory for the seventeenth month in a row. Though sharp, the pace of decline was the softest recorded since last October, as both permanent and temporary job openings fell at slower rates.
The latest data from the Office for National Statistics (ONS) showed there were 816,000 vacancies across the UK in the three months to February 2025, which was broadly unchanged from the figure recorded in the preceding three-month period (815,000 in the three months to November). The latest figure indicated that the number of open roles was almost 100,000 below that recorded during the same period a year ago (914,000 in the three months to February 2024).
Pay trends remain historically subdued
The rate of starting salary inflation picked up from February’s four-year low, but remained comfortably below the survey’s long-run average in March. Concurrently, temp wage growth improved slightly to a three-month high, but was only modest.
Anecdotal evidence indicated that while many employers increased pay to attract suitably-skilled candidates, panellists also acknowledged that tighter client budgets, muted demand for workers and improved staff supply had suppressed rates of growth.
Adjusted for seasonal factors, the Permanent Salaries Index pointed to an increase in starting pay for permanent staff for the forty ninth month in a row in March. The rate of inflation picked up from February’s four-year low to a solid pace that was the fastest since last August. That said, the increase remained weaker than the historical average.
There were reports that employers were willing to raise pay offers to secure suitably-skilled candidates. Permanent salaries rose across all four monitored English regions bar the North of England.
For many years Glencourt Associates has been one of the selected recruitment businesses that provides data for these monthly reports. For additional information behind this brief summary, contact Bob Garton at Glencourt Associates on 01342 712253.
