The latest national lockdown led to permanent staff hires plummeting in January, according to a UK jobs report.
Research conducted by KPMG and REC shows the reduction was driven by the return of tough coronavirus measures and greater economic uncertainty.
The resurgence of Covid-19 also caused growth in short-term vacancies to weaken in most sectors.
James Stewart, vice chair at KPMG, believes the latest Covid restrictions have knocked business confidence.
Stewart said: “There has been an uptick in short-term vacancies, but these are mainly in blue collar and the medical response industry, indicating that they are filling a temporary need for staff rather than pointing to long-term job opportunities.
“However, there is cause for optimism as businesses carefully monitor the vaccine rollout and look forward to the Budget next month.
“It gives the government the opportunity to further help the recovery in jobs and revive the UK’s productivity growth.”
Starting salaries fall
Pay trends also took a hit as recruiters reduced starting salaries and wages for temporary staff.
Covid-related redundancies increased staff availability, but the upturn was the softest seen for ten months.
This appeared to be a result of workers being reluctant to move roles in the current economic climate.
The report, compiled by IHS Markit, brings together questionnaire responses from around 400 UK employment consultancies.
Neil Carberry, CEO of the REC, added: “Economic uncertainty is weighing on employers’ minds even where they see potential for their own firm to grow, so it is no surprise that temporary work is leading the jobs recovery.
“This emphasises again how important flexible forms of work are to helping businesses and public services react to the pandemic.”