Although sharp overall, pay awarded to new permanent joiners increased at the slowest rate for a year-and-a-half, according to data.
The latest KPMG and Recruitment and Employment Confederation’s (REC), UK Report on Jobs October 2022 survey, revealed a “softening” of pay pressures during October.
The data, compiled by S&P Global on 400 UK recruitment and employment consultancies, found at the same time, temp wage inflation slipped to its lowest since May 2021, which recruiters say was because of the cost of living and competition for staff.
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HR consultant Gemma Bullivant said that while monetary pay is never significant enough on its own to “motivate, engage or drive high performance” in the workforce, employers shouldn’t rely on other total reward solutions alone.
“We need to be careful that non-monetary parts of the reward package, such as flexible working, are not overly relied upon or used as a blanket excuse to pay lower than is fair and reasonable,” said Bullivant.
“Companies should seek to do all they can to compensate fairly and in accordance with the market, and only look to non-monetary factors where absolutely necessary to top up the EVP, and remain attractive and competitive”.
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The report also found that although demand for staff continued to increase in October, the rate of vacancy growth softened for the sixth month running. Meanwhile, the total supply of candidates fell sharply once again during October and the decline in permanent staff availability remained “more acute” than that seen for temporary labour.
When explaining the latest drop in candidate numbers to REC, recruiters commented that people had become more reluctant to switch or seek out new roles due to concerns around the “weaker economic outlook, fewer foreign workers and a low unemployment rate”.
Neil Carberry, chief executive of the REC, said that activity, overall, is still well in advance of pre-pandemic levels, and that the results indicate caution from employers in comparison to the “hiring frenzy” earlier in the year.
“Decision-making timelines for permanent hires have extended, for instance. But vacancies and pay are still rising, temporary worker demand is high, and permanent hiring has fallen for the first time in almost two years,” he added that “activity is still well in advance of pre-pandemic levels” and that the data suggests “heightened employer caution, not a retreat from the market”.
Meanwhile, the REC and Lightcast’s latest Labour Market Tracker revealed that businesses are still “desperate for staff” despite economic and political volatility. The analysis showed a dip in new job postings in the week of 17-23 October with 154,000 ads posted - 3.4 per cent lower than a month earlier.
However, there were 217,000 new job postings in the previous week of 10-17 October, suggesting that the labour market is currently a mixed bag.