London is emerging as the UK’s hiring black spot, with demand for employees in the capital still falling as the rest of the country recovers, according to a monthly survey of recruiters.
September hiring activity in the UK, for both permanent staff placements and billings for temporary workers, showed the strongest month on month improvement in almost two years, according to the study by the Recruitment & Employment Confederation (REC) and KPMG.
Its latest monthly survey of hiring intentions on Thursday found that a majority of recruiters had seen an increase in activity last month, with the index reading of 56 well above the “neutral” level of 50.
However, London has not shared in the upturn as businesses reopened and restarted projects after the easing of coronavirus restrictions across the UK. The capital was the only one of four English regions where a majority of recruiters still saw hiring activity declining.
The report also pointed to the first month-on-month increase in vacancies since the onset of the pandemic, with an index reading for this measure rising from 43 in August to 50.6 in September.
Neil Carberry, REC chief executive, said it was “great to see [a rebound] happen”, even if it was to be expected given the scale of the fall in demand during the lockdown.
The survey’s findings add to mounting indications that the government’s renewed guidance for office staff to stay at home where possible is affecting low-paid workers in large city centres.
Most recruiters had seen a month-on-month drop in vacancies for secretarial and professional staff and for retail workers while there had been much stronger hiring in the IT sector, construction, engineering and for temporary blue collar roles, the REC/KPMG survey found.
That tallies with data from Indeed, the job site, which said last month it had seen a surge in the number of London-based jobseekers looking for work outside the capital — most commonly in non-specialist roles such as cleaners, warehouse workers or retail and sales assistants.
The REC/KPMG survey also found that competition for jobs has become fiercer across the UK despite the pick-up in hiring, as rising redundancies meant more candidates were available. Recruiters found this had led to a sharp fall in starting salaries for permanent staff and a slight easing in average hourly rates of pay for temporary staff.
“It’s concerning to see another rapid rise in total candidate availability,” said James Stewart, vice-chair at KPMG. “With increasing unease over what will happen in the coming months with the pandemic, Brexit and with the end of the furlough scheme in sight, the uncertainty for UK business is not going to dissipate any time soon.”