London Jobs Market: Still a Rough Ride in December
The latest KPMG and REC UK Report on Jobs paints a gloomy picture: hiring across the capital keeps slipping into the doldrums in December.
Key Numbers to Take Note Of
- Both permanent placements and temporary billings have seen sharp contractions.
- The slump in new permanent hires eased a bit compared to November.
- Demand for fresh talent keeps drying out, while layoffs and stalled projects push the number of job‑seekers up.
Salary Twist: The Good (and Slightly Surprising) News
Even in a market where too many people are vying for gigs, recruiters in London are shaking hands on higher wages. Starting salaries for permanent roles and hourly rates for temp workers both climbed faster than expected in December, hinting that companies are ready to pay the price for the right skill set.
How This Tale Was Told
The insights come from S&P Global, who gathered data by sending out questionnaires to around 100 recruitment and employment consultancies spread across the capital.
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Why London’s Recruitment is Feeling the Pinch
- Tax‑tide rising: Employers are adding more “keepers” on top of their budgets.
- Pay pressure: The city’s cost of living makes it hard to keep on the payroll.
- Cold start to the year: Hiring numbers have slid for the fifth month running.
So, the number of fresh permanent hires is dropping, the same as if everyone decided to skimp on the coffee.
Small Hope on the Horizon
Despite the gloom, the downward trend isn’t as steep in London as it is elsewhere. That leaves a silver lining: there are plenty of candidates out there, but maybe they’re just not the right-fit for the roles.
Time to Train the Talent
To fix the mismatch, London should lean on robust training programmes, especially in:
- Healthcare – placing more nurses and techs on the go.
- Engineering – pushing harder for the technical skills the city needs.
If the city spots these gaps and compensates with solid skill-building, there’s a chance the “war on work” turns into a playground of opportunity instead of a dreaded battlefield.
Rapid decline in permanent placements
London’s Hiring Blues: December’s Down‑turn Broken Down
What went wrong?
Recruiters around the capital have been feeling the crunch. For the fifth straight month, permanent placements have dipped. Even though the drop slowed a bit, the overall vibe is still pretty gloomy – thanks to the big “economic uncertainty” wave and that pesky Autumn Budget falling on companies’ toes.
Region‑by‑Region Snapshot
- London: Managed to pull the smallest exit strategy – a gentle slide that’s the only place where the decline is easing.
- South of England: Rugged terrain, steepest drop in new hires.
- Midlands: The oddball saffron—only region with a tiny bump in temp bookings.
- North & East: Keeping pace with the others but no special highlights.
Temporary Gloom
When it comes to temp billings, London takes the lead on the downtrend, pushing the poor numbers off track for a full year. The contraction here is even more brutal than the national average. Companies are easing back on temps because projects wrap up and new gigs aren’t lining up to fill the void.
Where’s the Rebound?
- South of England sees the deepest fall in temp bookings. No joy there.
- Midlands surprises everyone—got a faint rise in the stats.
Persistent Down‑trend Across the Board
December’s still a low‑point for permanent vacancies—trending downward five months in a row, hitting the lowest numbers since February. The seasonally adjusted index has been a bumpy ride, signaling an almost “fast‑forward” decline.
Temporary Workers? Guess Not
“Temp” demand’s taking a hit for the fourth consecutive month. The slowdown is among the fastest when compared to the same period in 2020. Two months running now, every region is flagging fewer temp slots left open.
Supply of permanent candidates expands rapidly
Labour Numbers Keep Stacking Up for the 25th Straight Month
December saw the permanent workforce in the capital rise for a record‑breaking twenty‑fifth month in a row. The uptick not only kept the momentum going but also picked up a little faster than the average growth seen over the whole period – and it even matched the broader UK trend.
Key Drivers Behind the Surge
- Redundancies – Many companies let go of staff, boosting the number of ex‑employees available for new gigs.
- Fewer Job Openings – With fewer places opening up, the market’s supply of permanent workers skated up.
Regional Snapshot
All four English regions we tracked had stronger growth in permanent workers, with the Midlands leading the charge.
Doing the Dance with Temp Workers
At the turn of the year, London didn’t just keep its crew steady – it added several temporary workers, matching the growth pace of November and staying in line with the UK average. The rise came mainly from:
- Wrapping up high‑profile projects, which left folks looking for the next gig.
- A shortfall of fresh business, so temps had to keep filling the gap.
- More redundancies, putting people in the job market.
What’s Happening Elsewhere?
Across the remaining three English regions, tempo numbers kept up the trend—not quite the same boost as London, but steady and in sync with the UK overall.
Starting salary inflation intensifies notably
Salary Inflation Takes a Wild Ride
Out of the blue, permanent starting salaries decided to turn up the heat again – not just a one‑off flare, but a steady climb for the second month straight. December was the sharpest spike yet, meaning companies are finally willing to dig deep into their pockets for the right talent.
Regional Show‑down
- London – The city that never sleeps is the biggest salary‑thruster, offering the highest raises for new hires.
- South of England – Talk about the quiet river: only region where pay actually dipped this time around.
- Other regions – A more mixed bag, but nothing on the scale of London’s wage fireworks.
Temporary Workers Get Some Payback Too
Temporary pay rates have been on a third‑month streak of growth in December. The seasonally adjusted index hit a six‑month high, though the numbers still hover below long‑term averages.
- In contrast to permanent hires, one region – the South of England – dipped in hourly wages for temp workers.
What the Industry Gossips Say
Recruiters are buzzing: “We’re gladly willing to pay more for the right skill set.” According to the latest survey, this sentiment carries over both permanent and temporary roles.
Line‑up from REC’s CEO
Neil Carberry had a straightforward view:
- “Businesses are already feeling the strain as they build their annual budgets, cutting costs after a tough Budget round.
- “But there’s a quick turnaround in sentiment. London’s decline in permanent placements was the mildest, and December always serves as a hiring low point. With a new year, optimism creeps in – inflation in check, unemployment low, and growth on the horizon.”
- “Recruitment is a real front‑line indicator. The sector contributed a massive £44.4 bn to the UK economy in 2023, so any change here tells us a lot about the broader economic recovery.”
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