UK employers increased the number of new staff in May at the slowest pace since early 2021 after a steep fall in the number of workers responding to job adverts.
After an increase in job switching by workers last year, often to secure higher pay, employers said the shortage of candidates since January meant they were unable to fill thousands of vacancies.
The permanent jobs index fell to 59.2 from a peak of 71.5 last September, where a figure above 50 indicates growth.
The survey by the Recruitment and Employment Confederation (REC) and KPMG shows how tight the UK labour market has become during the coronavirus pandemic. About 500,000 people have quit the labour force, many through ill health, since 2019.
While workforces in France and several other European countries have expanded compared with pre-pandemic levels, the UK’s shrinking workforce has left employers scrabbling to find skilled and unskilled workers to fill job vacancies.
Job vacancies declined in May for a third consecutive month, but only modestly to remain near record high levels, the REC said.
Employers seeking IT and computing staff posted the strongest increase in demand for permanent staff in May, the REC said, followed by employers in the hotel and catering industry.
The hospitality industry was among those hardest hit, although the recent disruption at UK airports has highlighted how airlines and airports, which laid off thousands of workers during the first two lockdowns, have struggled to recruit enough staff to meet the demand for flights this summer.
The report, which is compiled by S&P Global, was based on responses from about 400 UK recruitment and employment consultancies.
Claire Warnes, a spokesperson for KPMG UK, said: “For over a year now, we have
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