The number of businesses recruiting for permanent positions has 'fallen off a cliff', according to the Association of Professional Staffing Companies (APSCo).
The snapshot study found that 67% of its recruiting members had put permanent hiring on hold following the outbreak of Coronavirus.
Nine in 10 recruitment companies said that up to 50% of their contractors had already been terminated, and 76% of the remaining firms expect up to 50% to be terminated by 29 March.
The survey also revealed that 83% of recruiters were already considering redundancy on their own workforce, however, the survey was conducted before the government announced it would pay up to £2,500 of workers' wages. Of the measures announced by the government over the past week, 76% of APSCo members said covering workers' pay was the most important thing the government could announce.
One respondent to the survey warned that "permanent starts in April and May are now being told that their role is no longer available and so candidates have resigned from other jobs and are now out of work."
Ann Swain, chief executive of APSCo said: “Recruitment is a service industry and so the biggest business cost is the salary bill – the Government pledge to fund 80% of furloughed staff salaries up to a maximum of £2500 is obviously very welcome but the key will be how quickly that can be accessed. The clarity and simplicity of the rescue package whether that be loans, tax payment deferral or salary grants will be critical. It is also likely that HMRC and other financial services organisations will have a critical need for staff to process applications and APSCo members have ideal candidates ready and waiting.
"The VAT deferment will help cashflow, one of the key issues for recruitment firms, and the fact that the Business Interruption Fund will be interest free for 12 months and available from today will also be good news for our members. However, we are also concerned about the thousands of self-employed and freelance contractors who have had their assignments terminated and who will not be protected and who, it seems, will have to rely on the benefits system.”