Brexit concerns impact UK recruitment drive

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Brexit concerns impact UK recruitment drive (iStock/Bee-individual)

The fallout from last month's EU referendum in the UK continues to be assessed by analysts and organisations across the country, with the full impact of the public's decision to leave the EU yet to be fully realised.

However, new figures published by the Recruitment & Employment Confederation (REC) have highlighted a marked downturn in firms seeking permanent placements in what was the run-up to the referendum.

The latest Markit/REC Report on Jobs for June showed the first decline in permanent placements across the UK recruitment sector in the last 45 months - a downturn that has been largely attributed to the uncertainty caused in the weeks leading up to the referendum vote.

At the same time however, the level of temporary and contract staff placements rose across the country in June, albeit at their slowest rate for the last nine months. It demonstrates the fact that companies have become increasingly reticent to invest in permanent staff as a result of the referendum and are instead turning to temporary workers to meet their short-term recruitment needs.

Both permanent and temporary pay growth also diminished last month, with respondents citing the uncertainty over Brexit as a main driver in this area.

Across the UK, a number of regional differences in the report's findings were seen, with the largest monthly downturn in recruitment activities witnessed in London. Scotland saw a broadly unchanged month from May's data, while weaker rates of growth were reported in the Midlands and south of England.

It was not all bad news for the recruitment sector though in June, as demand for both public and private sector roles continued to rise during the month, with a larger increase in the latter. Meanwhile, the report showed the strongest growth in permanent placements was seen in the engineering industry, followed by nursing/medical/care and hotel and catering.

According to REC chief executive Kevin Green, the results highlight the fact that ensuring the continued health of the UK's labour market must now be a priority.

He stated: "Uncertainty during the run-up to the referendum saw many employers suspend permanent hiring and instead bring in temporary, contractor or interim staff to hedge against potential changes to their growth prospects.

"Whilst it is too early to assess what the impact of the vote to leave the EU will be on jobs, our data underlines the need for uncertainty to be minimised so that our economy and our labour market are not adversely affected.

"The best thing for business right now is clear and calm leadership and as much clarity as possible on what the post-EU future will look like."

Mr Green added that prior to the referendum, businesses across the UK were finding it increasingly difficult to find and secure the best candidates for their positions and the outcome of this landmark vote has arguably made this an even greater problem moving forward.

Company leaders hoping to secure the best and brightest staff must now ensure they are offering attractive and competitive packages to these individuals, especially to those who might be tempted to look outside the UK for employment.

Being able to have access to the most talented individuals in the years ahead must therefore also be a top priority for the government when negotiating the UK's departure from the EU.

Outstanding members of staff really can make the difference to the future of any business and the UK must remain a place where the top talent can be found and wants to work, Mr Green concluded.