The number of permanent staff appointments fell in October as rising Covid-19 cases weighed heavily on recruitment plans, with jobs in retail, hotels and catering hit particularly hard.
Greater uncertainty drove a marked rise in temporary placements, according to the latest KMPG and REC report on jobs, and overall demand for staff fell.
Read more: Pizza Express to axe 1,300 jobs in the UK
Widespread reports of redundancies and fears over job security fuelled a further rise in candidate availability.
But an increased labour supply combined with reduced employer budgets contributed lower starting pay for both permanent and temporary workers.
October saw a growth in permanent places of employment in the Midlands and the North of England, however this was offset by falls in the South of England and London.
Jobs in retail, hotels and catering saw the steepest fall in both permanent and temporary positions in October. IT and computing saw the strongest rise in permanent staff demand.
The steepest increase in short-term vacancies was seen in ‘blue collar’ sectors, followed by nursing, medical and care jobs.
KPMG vice chair James Stewart said: “With a reluctance to recruit permanent staff and a big increase in people available for work, the impending lockdown puts the UK jobs market in a precarious position.
“While the furlough scheme extension may give a brief respite, it will fuel economic uncertainty and further dampen prospects for jobseekers, hitting hiring activity hard.”
REC chief executive Neil Carberry described the findings as a “dose of realism” following an economic bounce in the summer.
“These figures show that hiring was still going on – and we believe that firms are better prepared to trade through these new restrictions than they were in March,” he said.
“Nevertheless the outlooks remains uncertain and concerning. We face a challenging winter and temporary work will be a vital tool for keeping businesses going and people in work.”