Hiring Drops Due To Brexit

It looks like the UK employment market’s constitution is continuing to erode in the face of Brexit uncertainty. Recruitment industry group REC conducted a survey and report in conjunction with KPMG on the amount of new hires recruitment companies have conducted recently, which revealed permanent job hires are down again in June.

Employees are Staying Put

One of the reasons for slower hiring rates that there are less candidates to fill them. This is partly due to the fact that employment rates are still fairly high. Participants in the REC survey, however, also highlighted the fact that the majority of employees are unwilling to change jobs, or look for new roles in the current climate.

More Temporary Hires

On a slightly more positive note, temporary hires did increase throughout June, although not by much. In fact, according to data from the REC survey, this was the weakest temp hiring growth since the 2013 financial crisis. One benefit to temporary workers, at least, is the fact that temporary wages have grown at their fastest rate yet over the past seven months.

Downward Trends

The REC has been surveying recruiters for the past few months, and so far the results haven’t presented the best picture as the deadline to Brexit slowly draws nearer. It’s been easy so far to highlight the strength of the employment market by looking at the number of people in employment alone. These new survey results are starting to show the cracks, however.

Furthermore, the economy is starting to shrink, and business confidence is starting to falter.

As Neil Carberry, the CEO of the REC said when asked for comment: “The gentle slowdown in permanent hiring and slower growth of temp billings is a reminder to all politicians that businesses and employees across the country are looking for a smooth path to a negotiated Brexit outcome.”

Any path, let alone a smooth one, still seems hard to fathom given the current situation. Neither of the tory leadership candidates are being particularly clear about how they will handle Brexit, while Ursula von der Leyen, the likely new head of the European COmmission, has already said that she isn’t willing to reopen talks.

The hard reality is the same as it always has been then, despite the political bluster – Britain accepts the EU deal or leaves without one. Unfortunately, given the recent history of the process to leave, the chances of businesses or employees having a clear idea of what to plan for in October aren’t looking good.

Until that happens, this slow downward trend in the employment sector is almost certain to continue.