UK employers hired permanent staff in December 2018 at the slowest rate since April 2017, according to the latest Report on Jobs from the Recruitment and Employment Confederation and accountants KPMG.

The report stated that strong demand for staff and greater efforts to secure suitable candidates quickly supported the latest rise in permanent placements in December, however it was also reported that candidate shortages hampered overall growth, with some recruiters mentioning that people were nervous to seek out new roles due to Brexit uncertainty.

Overall, the availability of workers continued to fall sharply at the end of 2018, with the rate of reduction quickening slightly since November.  The deterioration in permanent labour supply quickened since the previous month, while short-term staff numbers fell at a softer but still marked rate. The report stated that the low candidate supply weighed on permanent staff appointments during December.

Agencies’ temporary/contract staff billings continued to increase in December. Notably, the rate of growth quickened from November and was sharper than its historical average.

Meanwhile, vacancies continued to rise sharply in December. At 60.1, the Report on Jobs Vacancies Index edged up from 60.0 in November and remained well above the neutral 50.0 level. The data also showed marked growth of both permanent and temporary positions. Vacancies for both private and public sector staff increased further in December.

Neil Carberry, Recruitment & Employment Confederation, commented on the report, “It’s no surprise that growth in new permanent jobs dropped to its lowest level in almost two years last month, because economic uncertainty is now affecting companies’ hiring plans. But the underlying strength of our labour market is still there – vacancies are high and temporary placements rose in the run-up to Christmas. There are opportunities out there for people who want to change job in 2019.”

As demand for workers generally outstripped supply, starting pay continued to increase sharply for both permanent and short-term workers in December. The rate of starting salary inflation was among the quickest seen for over three years, while temp pay growth also remained sharp by historical standards.

“A lot of people don’t want to move jobs right now because there is so much uncertainty around,” James Stewart, Vice Chair at KPMG, said. “In addition, the supply of EU citizens entering the UK for work is slowing while every sector continues to take on more staff. This means a near-record number of vacancies are going unfilled and talent gaps in industries like engineering, finance, and IT are opening up.”

“December is always a bit of lean period in the jobs market but Brexit has amplified that effect,” Stewart added. “Consequently companies are having to offer increasingly attractive and creative packages to tempt new talent on board. If you aren’t looking forward to another year in your current job, now is a good time to go job hunting.”