5 April 2019
Permanent staff appointments decline as Brexit-related uncertainty intensifies

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Key findings 

  • Permanent placements fall at quickest pace since July 2016
  • Vacancies increase at slowest rate since August 2016
  • Availability of candidates continues to decline sharply


The latest KPMG and REC, UK Report on Jobs showed that heightened uncertainty towards the outlook underpinned the fastest decline in permanent staff appointments since mid-2016 in March. Brexit-related uncertainty also contributed to a further steep decline in staff availability.

The report, which is compiled by IHS Markit from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies, showed that permanent staff appointments fell for the second time in three months in March, and at the quickest rate since the aftermath of the Brexit referendum result in July 2016. Concurrently, billings received from the employment of short-term staff rose at the second-slowest rate for two-and-a-half years.

Low candidate availability also continued to hamper staff hiring, with recruiters noting further sharp falls in both permanent and temporary candidate numbers. This, in turn, sustained upward pressure on rates of pay. That said, growth of both permanent starters’ salaries and temp wages waned slightly since February. Meanwhile, overall demand for staff expanded at the softest rate since August 2016.

Permanent placements fall at quickest rate since mid-2016 

Recruitment consultancies signalled a renewed drop in permanent staff appointments amid heightened uncertainty towards the outlook and reports of delayed decision making. Though modest, the rate of reduction was the fastest seen since July 2016. Temp billings meanwhile expanded at the second-slowest rate for two-and-a-half years (after January 2019).

Although still indicative of a strong rise in overall demand for staff, the index measuring vacancies edged down again in March. Notably, demand for workers increased at the softest pace since August 2016, with both permanent and short-term vacancies rising at slower rates.

Candidate supply continues to decline

The availability of both permanent and temporary staff continued to fall markedly at the end of the first quarter. Recruiters commonly linked the fall to a reluctance among candidates to move roles amid Brexit-related uncertainty, and a generally low unemployment rate across the UK.

A combination of lower candidate availability and strong demand for staff led to further increases in pay. That said, rates of pay growth softened since February. The latest increase in starting salaries, though sharp, was the slowest recorded for just under two years. Meanwhile, temp pay growth was the least marked since March 2017.

Regional and Sector Variations

Regional data showed that permanent staff appointments declined in the Midlands, London and the South of England. Meanwhile, the North of England signalled a modest expansion. The North of England registered a marked rise in temp billings, while softer increases were seen in London and the Midlands. In contrast, the South of England saw a renewed reduction.

Data showed a relatively weak picture for public staff demand compared to the private sector. Demand for both permanent and temporary workers in the private sector continued to rise strongly in March, albeit at weaker rates than seen in February. In contrast, permanent public sector vacancies declined solidly, while temp worker demand in the sector rose only slightly.

IT & Computing and Engineering topped the rankings for permanent staff demand at the end of the first quarter. Increased vacancies were also seen across the other monitored sectors, with the exception of Retail.

Nursing/Medical/Care saw by far the strongest increase in demand for temporary workers during March, with Hotel & Catering in second place. However, Executive & Professional and Retail both saw temp vacancies fall in the latest survey period.

Commenting on the latest survey results, Neil Carberry, Recruitment & Employment Confederation chief executive, said: 

“We have a fantastic labour market that has delivered high employment and flexibility for workers because it helps companies meet their needs easily. It’s a British success story. But Brexit uncertainty has put the brakes on.

“With business investment rates poor, and little certainty about the path ahead, today’s data shows that the time for political game-playing is over – this situation is beginning to affect people’s daily lives as permanent staff appointments fell, and the growth of temporary jobs and starting salaries weakened.

“We can make this slowdown a blip. Ending the uncertainty around Brexit will help firms invest and create jobs. Firms across the country need a stable plan that tells them where they will be next year – not next week.”


On persistent skill shortages in some sectors, Neil added: 

“Two years on from its introduction, the apprenticeship levy has failed to deliver for people building their careers by working on flexible and temporary contracts. It is time this changed – a flexible skills levy that helps firms to invest in every worker would boost productivity and opportunity for temporary and permanent staff alike.”

The REC is currently conducting a survey on the apprenticeship levy, to aid in our research and campaigning work. We would like all REC members who pay the apprenticeship levy to please give us their feedback and insight on this important issue by completing the survey. 


James Stewart, vice chair at KPMG, said: 

“Brexit has been sapping business confidence for months, and now it is causing the jobs market to grind to a halt. With unclear trading conditions ahead, many companies have decided to hit the pause button on new hires and reduce their dependency on temporary appointments.

“At the same time we are seeing a flight to safety in the candidate market. Applicant availability has fallen sharply, with the majority of people looking to switch-up or develop their careers concluding now isn’t the right time to abandon the haven of an existing job. The consequence of a sluggish jobs market is a drag on the economy – with poor candidate availability impeding business growth and hampering restructuring efforts.

“IT recruitment has been slowing for months, but now we’re seeing particularly sharp falls in recruitment activity across financial and professional services. Economic bellwether sectors like retail, construction, hotels and catering are also seeing steep falls in recruitment activity. This along with signs that pay growth is cooling will concern UK economists and investors.”

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