The June UK Market Briefing highlights the gap between a slightly better unemployment rate and weaker hiring conditions. Unemployment eased to 4.9% in February–April, but vacancies fell to 707,000 in March–May, below their pre-pandemic level. Youth unemployment reached 16.2%, while the early May payroll estimate was 119,000 lower year on year.
Employers favour flexibility
The KPMG/REC survey showed permanent placements falling at their fastest pace in ten months. Temporary billings, however, grew at their strongest rate in more than three years as employers sought flexibility amid uncertainty and cost pressures.
Regular pay growth held at 3.4%, but CPIH-adjusted real regular pay increased by just 0.1%. Public-sector regular pay growth of 5.1% contrasted with 2.9% in the private sector. Energy costs continued to put pressure on household purchasing power and business margins.
What this means for talent leaders
Contingent workforce planning should form part of a considered capacity strategy. Organisations also have an opportunity to strengthen apprenticeships and entry-level pathways as youth unemployment rises.
Development, culture and flexibility can support retention where salary budgets are limited. Regional differences warrant attention, with the North the only region reporting permanent placement growth in the survey.
The briefing expects continued pressure on permanent hiring and comparatively resilient temporary staffing. Payroll estimates remain provisional, and the report recommends reading Labour Force Survey figures alongside other employment measures.