New research has found that following the results of the EU referendum vote in June, the number of people being employed for permanent positions has dropped.
Markit has compiled the annual Recruitment and Employment Confederation (REC) report, which shows that recruitment for permanent jobs dropped in July by its fastest rate since May 2009 – which was right in the middle of the economic recession.
In July, 38% of recruiters reported handing out fewer permanent contracts to new staff, while this figure was 32% in June before the shock Brexit result was revealed.
Brexit uncertainty making employers nervous
With virtually nothing known for definite about the possible consequences of the UK leaving the EU and speculation rife, it’s not surprising that employers are bracing themselves for potentially tough times ahead. Uncertainty over the UK’s future economic health seems to have made many companies nervous, leading to the drop in new permanent hires as well as an increase in temporary staff.
Of those surveyed by the Recruitment and Employment Confederation in July, 34% of recruiters reported a rise in temporary and contact hiring in June, up 2% compared to June. This suggests that many are taking a ‘wait and see’ approach to the Brexit result, unwilling to commit to and invest in long-term staff in case their business suffers from the consequences of the UK exit from the EU over the next couple of years.
Permanent recruitment steady in the north
The findings are not all bad news for those looking for permanent positions and job security. The report revealed that the north of England actually saw an increase in the hiring of permanent staff in July, although the increase was the weakest it has been for three years.
Commenting on the findings of the survey, the REC’s CEO Kevin Green said:
“The UK jobs market suffered a dramatic freefall in July, with permanent hiring dropping to levels not seen since the recession of 2009. Demand for staff remains strong with vacancies continuing to rise, but the sharp fall in placements suggests that businesses are highly cautious about committing to new hires. Economic turbulence following the vote to leave the EU is undoubtedly the root cause.
“The record-high employment rate and ongoing skills shortages have made it difficult for employers to find suitable candidates for the roles available in the past, and this remains the case. We’re now seeing the added problem of individuals deciding to stay put rather than change jobs in the current environment.”
Unsurprisingly, the REC found that the medical sector was suffering the most in terms of demand for both permanent and temporary staff. Professional and executive staff were not likely to find temporary roles, while construction workers are the most likely to struggle finding permanent positions.
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