The introduction of the new National Living Wage at the start of April and the looming EU referendum appear to have prompted thousands of companies to hold back on recruitment, according to job site Indeed.
The company said there was a 9% fall in new job vacancies advertised on its website in April alone, with the number of vacancies down 12% since the start of the year.
Only one industry - hospitality - saw an increase in job listings in April, likely down to seasonal factors ahead of summer work, Indeed said. Vacancies decreased in all other sectors, with the number of openings for HR professionals falling 18%, and even financial services businesses cutting recruitment by 15%.
Indeed said the the slump began in March and accelerated in April, leading to the conclusion that employers’ reluctance to hire is being driven by a combination of uncertainty over the outcome of the EU referendum and the introduction of the National Living Wage on 1 April.
Meanwhile the pay rises provided by the National Living Wage have been spread unevenly across the country, with workers in North East England enjoying the greatest benefit. Six per cent of jobs advertised in the North East during the first quarter of 2016 paid less than the £7.20 per hour that is now the legal minimum for workers aged 25 and over. This compares with just 2.2% of jobs listed in South East England and London during the same period, suggesting that nearly three times as many workers in the North East, as a share of the regional workforce, will have received a payrise in April. Other areas with high numbers of jobs paying less than the National Living Wage included Northern Ireland (5.9), Wales (5.3%) and Scotland (4.8%).
Mariano Mamertino, economist at Indeed, said: “The introduction of the National Living Wage has already proved divisive, and our findings will fire the debate further. While thousands of the UK’s lowest paid workers received a welcome boost to their April pay packet, the benefits have inevitably been concentrated in regions with higher numbers of poorly paid jobs – like North East England, Northern Ireland and Wales.
“Yet even by marginally eroding employers’ appetite to hire more staff, the policy may have unwittingly made life somewhat harder for some jobseekers. Job vacancies in 12 of the 13 sectors tracked by Indeed fell in April, accelerating a trend that began in March following the announcement of the EU referendum.
“The combination of business uncertainty about the potential impact of a Brexit, the slowdown of the economy amid global economic headwinds and a sudden increase in the wage bill for many firms has triggered a sharp cooling in the jobs market.”