British employers’ demand for staff has plummeted to its lowest level in four years this November, as Chancellor Jeremy Hunt’s recent Budget tax increases cast a shadow over the pre-Christmas employment landscape. The latest survey from KPMG and the Recruitment and Employers Confederation reveals a troubling decline in the vacancies index from 46.1 to 43.9, marking the most severe contraction in job openings since August 2020.
The ripple effects of increased employer National Insurance contributions are already visible in the labour market. KPMG’s group chief executive and UK senior partner, Jon Holt, notes that organisations are carefully evaluating the implications of rising employee costs, leading to a marked deceleration in recruitment activities across all sectors.
Seasonal hiring has been particularly hard hit, with job postings for temporary Christmas positions showing a stark 39% decrease compared to last year and sitting 46% below 2019 levels, according to data from Indeed. The overall job market reflects this downturn, with postings 14% lower than pre-pandemic figures.
Major retailers have adjusted their seasonal recruitment strategies accordingly. Tesco has reduced its temporary staff target to 26,000 from last year’s 30,000, while Sainsbury’s aims to employ 20,000 workers, down from 22,000 in 2023. Only Marks and Spencer has bucked the trend, planning to hire 1,000 more employees than their previous year’s target of 10,000.
The British Retail Consortium’s economist, Harvir Dhillon, highlights that wholesale and retail labour demand has “cooled very significantly.” The combination of persistent food inflation, increased labour costs, and the upcoming rise in the national living wage presents a challenging environment for retailers attempting to balance pricing strategies with profit margins.
The employment landscape transformation extends beyond seasonal shifts, with hospitality sector leaders noting a move away from temporary contracts. Kate Nicholls, chief executive of UKHospitality, reports that while festive bookings remain stable, the industry is gravitating towards more permanent yet flexible employment arrangements, reducing the traditional surge in Christmas-specific job advertisements.
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