‘The coronavirus pandemic has put the labour market on pause’

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'The coronavirus pandemic has put the labour market on pause'

“The coronavirus pandemic has put the labour market on pause.” These are the words of Neil Carberry, chief executive of the Recruitment & Employment Confederation (REC) as permanent and temp places dropped at their steepest level for over a decade.

The KPMG and REC UK Report on Jobs found that due to the spread of COVID-19 temporary and permanent positions have dropped as businesses are postponing their plans to take on new staff.

For the first time in over a decade, the number of vacancies has reduced, with the weaker demand for staff having a knock-on effect on wages rising as pay increase pressure has now weakened due to the situation.

After the previous three months saw permanent positions rising, they have now declined sharply in March.

According to the report, temporary vacancies were also hit, with a combination of the COVID-19 and the pending IR35 policy changes.

James Stewart, vice chair at KPMG, said:

Unsurprisingly, COVID-19 has already impacted the UK jobs market with recruitment activity falling away as uncertainty grips the nation.

Firms are cancelling or postponing hiring decisions although, as you would expect, the demand for temporary healthcare professionals and manual labour workers saw a significant uptick.
UK business needs to do what it can to adapt and survive this pandemic – and be able to emerge in the best position possible to ramp up once the crisis comes to an end.

Mr Carberry said:

The coronavirus pandemic has put the labour market on pause. It does mean massive disruption in the short term, but we need to remember that this has to be done in order to protect businesses and save lives.
What we should be concerned about is how we stop that short-term disruption becoming longer-term economic depression.

To do that we need to maintain employment levels as much as possible. Businesses in high-cashflow sectors like recruitment and hospitality need to be able to access government support much more quickly than they currently can, or they will not be able to afford to furlough their workers. This and other measures like government covering statutory sick pay for all firms will help people and firms to stay afloat now, and help the economy bounce back once the crisis is over.

This report was put together by IHS Markit, an information provider, from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.

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