UK businesses are turning to temporary workers rather than permanent staff as weak confidence, rising costs and global uncertainty weigh on hiring plans, recruiters say.
A new report from recruitment firms says permanent staff appointments fell in May at the fastest rate for 10 months. Employers appear reluctant to expand their long-term headcount while the economy remains fragile, with political uncertainty in the UK and conflict in the Middle East adding to wider caution.
The findings are based on a survey of 400 UK recruitment and employment consultancies carried out in mid-May. Recruiters said more candidates were looking for work, partly because of redundancies, fewer vacancies and concerns about job security.
At the same time, demand for staff has weakened, and many employers are working with tighter budgets. As a result, starting salaries and temporary pay rates rose only modestly in May compared with the previous month.
The nursing, medical and care sector was the only area monitored by the report to record a higher demand for permanent staff. Retail saw the sharpest fall in permanent vacancies, reflecting continued pressure on consumer-facing businesses.
The report adds to signs of strain in the UK labour market. Official figures recently showed the unemployment rate rising unexpectedly to 5% in the three months to March, while wage growth has slowed.
It also follows a Government-backed report warning that more than one million young people are now not in work or education, the highest level for more than a decade.
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