Hiring in London for March declined at close to the fastest rate since 2020, but employers are becoming more optimistic about their hiring outlook over the next year.
According to the KPMG and REC London labour-market pulse check, the capital’s rating fell to 42.2, the second-lowest figure since 2020. A score above 50 represents an improved hiring outlook when compared to the prior month, and below 50 means the outlook is negative.
The London outlook was the worst for any region in the UK, and compared with the nationwide figure of 46.3.
Besides October 2022, the only times the index has been lower in the last 20 years were the heights of the pandemic and global financial crisis.
Yet despite the low monthly figure, employers remain optimistic about their future hiring plans. One in four expect to see an increase in their permanent staff headcount over the next 12 months while the amount expecting a decline plummeted to just 6.1%.
Hospitality firms are the most likely to expect to hire more, with four in 10 doing so, followed by sales and retail and life sciences.
“The economy may be stalling, but the capital’s firms are looking forward to the future with more confidence as they plan a hiring surge,” said Muniya Barua, deputy chief executive of BusinessLDN, which supports the monthly pulse check.
Anna Purchas, Senior London Office Partner at KPMG, said that while it might be a tough time for hiring at the moment, businesses that are able to add staff now may reap the benefits when the economy picks up.
“It’s a volatile jobs market in the capital and we have skills shortages in key sectors and slowing workforce participation; those employers who hold their nerve and invest in retention, skills and recruitment now are most likely to benefit most when the economic upturn comes,” she said.
