Home Recruitment Contractor pay takes a hit as recruitment activity continues to dwindle

Contractor pay takes a hit as recruitment activity continues to dwindle

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Rates of pay for contingent workers fell at the fastest month-on-month rate for eleven years in May, whilst permanent placements and temp billings both fell at the second-sharpest rates on record as the Covid-19 pandemic continues to weigh heavily on recruitment activity, according to the latest research by the Recruitment and Employment Confederation (REC) and KPMG.

June’s Report on Jobs survey revealed a job market at a virtual standstill, with respondents frequently citing the global health crisis and subsequent company closures as the cause, as clients cancelled or postponed hiring plans.

Mass redundancies and furloughed staff led to the fastest increase in people looking for work since July 2009, which, combined with a slump in demand for staff, led to “steep falls” in salaries and pay rates.

Nine of the ten market sectors analysed registered a fall in demand for permanent staff in May, with the steepest drop unsurprisingly in the retail sector.  The only sector to see higher demand for staff was nursing, medical and care.  The largest decline in vacancies was in the private sector, although demand for staff in the public sector also fell “at a historically sharp pace”.

Commenting on the survey, the chief executive of the REC, Neil Carberry, said:

“Given the impact of the lockdown in early May, it’s no surprise that these figures look bleak. But in the two weeks since this data was collected, lockdown rules have been eased and the feedback we get from recruiters every day suggests that the slight improvements that we can see in the placements and vacancies data have continued. I’m also hearing from business leaders all over the country that things are starting to look up. There is a long way to go, but it’s time to talk about how we recover from this crisis.

Contractor pay takes a hit as recruitment activity continues to dwindle

“Collaboration between government, businesses and recruiters will be vital as we try to get the economy up and running again. The UK’s staffing and recruitment companies are experts at helping people find work, and we are ready to support jobseekers in the months ahead.”

James Stewart, vice chair at KPMG, said: “Lingering uncertainty around the COVID-19 pandemic, and when the outlook may improve, continues to take its toll on the UK jobs market.

“Hiring plans which were put on hold in March remain on ice, with many businesses focusing on maintaining their current staff rather than expansion or replacement. 

“The number of people looking for work has risen at the quickest rate since July 2009 making it a highly competitive market. With a potential July stimulus package from the Government set to include a focus on retraining and skills, adaptability will be the key to success for jobseekers in 2020.”

5th June 2020.