Firms pausing hiring plans, say recruiters

Firms are pausing or paring back hiring plans because of a subdued economic outlook and rising payroll costs, according to recruiters.

A survey of 400 recruitment agencies suggested a “marked” fall in candidates being placed in permanent and temporary jobs.

The Recruitment and Employment Confederation (REC) and KPMG said there was also a weaker demand for workers, highlighted by a drop in vacancies in February.

More people were available for work as a result of redundancies, said the report, which was said to be keeping a lid on pay pressures.

Private sector

Neil Carberry, REC chief executive, said: “After a long winter, there are some hints of a turn in the labour market as we head into spring. This is led by the private sector – despite recent tax rises – and that shouldn’t be missed.

“Enabling companies to grow is at the heart of our prosperity – the Chancellor must use the spring statement to build their confidence in growth.

“At the moment, though, things are still slow as companies hold their breath in the face of significant costs rises from April with changes to national insurance and the national living wage.

“Despite a long slowdown, some areas still face skill shortages. This comes from mismatches, training gaps and the impact of an ageing population.”

‘Softer decline’

Jon Holt, group chief executive at KPMG, said: “While it is still a wait-and-see approach to hiring, with February data showing companies continue to hold back on recruitment, the softer decline could be an indication that expectations of further interest rate cuts and better-than-expected recent economic data are starting to release some of the pressures on business.

“But several headwinds to growth remain, and we should expect a spring statement that is fiscally constrained due to growing spending pressures and global uncertainty.”