Jo Thompson Recruitment contributes to the Report on Jobs, a comprehensive guide on the UK labour market drafted by KPMG and the Recruitment & Employment Confederation (REC), compiled by IHS Markit. This monthly report is built upon survey data from recruitment consultancies and employers, providing valuable insights into the latest labour market trends.
Latest UK Report on Jobs Highlights
The latest UK Report on Jobs by the REC, KPMG, and IHS Markit highlights rising candidate availability, subdued pay pressures, and ongoing challenges in the UK job market.
Commenting on the latest survey results, Jon Holt, Group Chief Executive and UK Senior Partner KPMG, said:
“At a time when global uncertainty is peaking and businesses are assessing the impact of market volatility alongside rising employment costs, the latest data demonstrates how the economic reality continues to weigh heavy on the labour market. With cost management a focus, those employers who are hiring are focused on securing the best talent, and while the rate of pay inflation has improved from last month’s four-year low, growth in starting salaries remains below the historic average.
“Recent global events have put pressure on any growth prospects in the UK, so it is unlikely that we will see an improvement in the data in the near term. Therefore, redoubling employee engagement programmes and maintaining morale for existing employees, who will also be concerned about uncertainty in the market, will ensure that businesses are ready to take advantage of any green shoots when they do appear.”
Commenting, Neil Carberry, REC Chief Executive, said:
“Today’s report shows that there were some signs of progress in the jobs market in March with permanent hiring in London ticking up a little, while the drops in other locations were not as sharp as those seen at the start of the year. The decline in temp billings at the UK-level also moderated. Given the substantial effects of the Government’s decision to increase payroll taxes hugely, these figures were if anything slightly better than expected and suggest that there is potential in the market. Nevertheless, activity in the UK jobs market has now been subdued for almost two and a half years.
“A cyclical hiring upturn was always likely in 2025, but the near-term prospects for this have been made all the more uncertain by the actions of the US Government in upending the global trade system. We can’t ignore the immediate and second-order effects of this context even if the UK is better positioned than many nations to weather the storm. Announcing support for the auto sector is one thing but the faster we have clarity on how the industrial strategy will support all sectors the more likely employer sentiment on hiring and investing will remain stable. And it is even more important now that the Government reconsiders the scale of rising costs of employment after this week’s rise in National Insurance – a full review of the impact of the Employment Rights Bill, and changes to simplify compliance costs, would be welcomed by businesses across the country.”
Executive Summary
The main findings for March are:
Hiring activity declines again in March
UK recruitment consultancies signalled a further reduction in hiring activity in March. Panel members frequently mentioned that economic uncertainty, tighter recruitment budgets and reduced client activity had weighed on staff hiring. Permanent placements have now declined in each month for the past two-and-a half years, with the pace of reduction broadly unchanged from February and sharp. Temp billings meanwhile fell at the softest rate in three months, albeit solidly overall.
Supply of labour rises at fastest pace in over four years
The availability of staff increased sharply in March, with the rate of growth the quickest seen since December 2020. Recruiters noted steeper upturns in both permanent and temporary labour supply, with the former registering the sharper rate of expansion. The increases in availability were often linked by panel members to redundancies and fewer job openings.
Vacancies fall at softer, but still marked rate
Overall demand for staff continued to weaken at the end of the first quarter, with the respective seasonally adjusted index posting in contraction territory for the seventeenth month in a row. Though sharp, the pace of decline was the softest recorded since last October, as both permanent and temporary job openings fell at slower rates.
Pay trends remain historically subdued
The rate of starting salary inflation picked up from February’s four-year low, but remained comfortably below the survey’s long-run average in March. Concurrently, temp wage growth improved slightly to a three-month high, but was only modest. Anecdotal evidence indicated that while many employers increased pay to attract suitably-skilled candidates, panellists also acknowledged that tighter client budgets, muted demand for workers and improved staff supply had suppressed rates of growth.
Special Feature: Master the IT job market: Stay ahead in tech hiring
Digital Literacy: A Necessity in the Modern Workforce
In today’s rapidly evolving job market, digital skills are indispensable to a modern workforce; employers increasingly expect workers to be proficient in areas such as data analysis, cybersecurity, and digital marketing.
Despite the emphasis on digital literacy across the UK job market, data from the Recruitment and Employment Confederation (REC) finds job postings for tech-specific roles saw a significant decline when comparing 2023 jobs postings to 2024.
Roles such as Web Design Professionals, Programmers, and IT Support Technicians experienced the most significant decreases. REC Chief Executive Neil Carberry noted that this trend was a reversal from the high demand for these skills seen during and just after the pandemic. But, as companies invest in IT transformation during economic recovery, the REC is optimistic that these roles will bounce back.
Signs of Stabilisation
The latest Report on Jobs by KPMG and the REC shows a continued decline in IT staff demand in March, but with a slower rate of contraction. The index for permanent IT vacancies rose to 46.8 from 41.3 in February, indicating the joint-weakest reduction since October 2023. Similarly, the temporary IT staff index increased to 46.6 from 41.3, marking the softest decline since November 2023. While challenges persist, these improvements suggest potential stabilisation in the IT job market.
Soft skills should not be forgotten.
Though technical skills may dominate job postings, soft skills remain critical.
Communication, management, and problem-solving are highly valued as IT professionals increasingly collaborate with cross-functional teams. Leadership is also in high demand, with employers seeking individuals who could drive innovation and mentor junior colleagues.
Rising salaries and regional opportunities.
Despite a decline in jobs postings, salaries in the IT sector are on the rise . Salaries have increased by 9.4% since April 2024, with the median advertised salary currently standing at £44.5k, . London remains the heart of IT hiring, but cities like Manchester, Bristol, and Birmingham are emerging as vibrant tech hubs, offering alternative markets for both employers and candidates.
A mismatched talent pool.
The future of IT is defined by agility, security, and data. Agile methodology, Python, and Microsoft Azure are among the top in-demand, specialised skills in job postings right now.
A comparison of these job postings with workforce profiles, however, reveals a mismatch between the skills employers are looking for and those available in the talent pool. For instance, whilst SQL is relatively balanced in supply and demand, there is a significant shortage of cloud expertise, particularly in Microsoft Azure. Computer programming and consultancy meanwhile dominate job postings, but sectors such as financial services, healthcare, and education are also driving significant demand for IT expertise. This diversification signals that IT skills are becoming indispensable across a broad range of industries.
Key Takeaways for Success
For employers, winning the talent war requires speed, adaptability, and investment in skill development.
Successful organisations will prioritise upskilling, adopt flexible hiring approaches, and foster continuous learning and innovation.
For job seekers, developing expertise in high-demand areas like cloud computing, cybersecurity, and data analytics, whilst honing communication and leadership skills, will open doors to exciting opportunities in the evolving IT landscape.
Whether you’re an employer looking to future-proof your workforce or a professional seeking to make your mark ion the tech world, those who adapt quickly and strategically to these market shifts will be best positioned to thrive in 2025 and beyond.
Regional Insights: South of England
Commenting on the latest survey results Steve Hickman, Reading Office Senior Partner at KPMG UK, said:
“While the UK job market remains under pressure, the pace of decline in the South slowed in March – suggesting that things may be bottoming out despite broader economic uncertainty.
“Notably – and perhaps counterintuitively – both candidate availability and starting salaries are on the rise, with employers appearing willing to pay more to attract and secure the right skills.
For the South East’s talent pool, it’s further proof that experienced and skilled individuals are still able to access roles in thriving sectors such as life sciences and tech.”
Hiring Activity
Permanent placements decreased, marking a two-year decline, with a 41.0 index in March. Temporary billings fell for the fourteenth consecutive month, but at a slower rate, with a 44.8 index. The decline in hiring activity is attributed to a weaker economic climate and recruitment freezes.
Candidate Availability
Permanent staff availability rose sharply, with a 60.4 index, indicating more candidates seeking roles due to redundancies. Temporary candidate availability increased for the twenty-third month, reaching a five-month high, driven by layoffs and fewer contract opportunities.
Pay Pressures
Starting salaries for new permanent roles increased for the first time since October, with a 52.0 index, though still modest. Temporary wages rose at the fastest rate in nine months, with a 51.0 index, reflecting efforts to attract desirable candidates.
Skills in Short Supply
Permanent roles in demand include accounting, engineering, IT, and healthcare professionals. Temporary roles in demand include drivers, electricians, and software developers, indicating a need for skilled labour across various sectors.
Regional Comparison
The South of England’s job market shows a slower decline in placements compared to the North, with London experiencing growth in permanent appointments. Candidate availability increased across all regions, with the North seeing the sharpest rise.
At Jo Thompson Recruitment, we communicate seamlessly with hiring managers, fuel collaboration by sharing information and insights. Hiring managers are time-poor, so providing pre-qualified candidates with data-driven insights and creating the resilient, agile and diverse workforce you need to succeed is a major win.
We can help you refine your data-driven recruitment strategy and tailor your approach to each target audience. Help you make informed talent decisions around diversity and hidden talent pools. To talk about how Jo Thompson Recruitment can help you with your resourcing needs, please email us at info@jtrltd.com or give us a call at 01635 918955 for more details.