Permanent staff hiring declined at the sharpest pace in over two years in April, according to a report from KPMG and the Recruitment and Employment Confederation published Wednesday. At the same time, companies registered the quickest jump in billings from temporary staff since September.

Job vacancies are still increasing, but growth is losing steam. Businesses across the UK have pressed pause on hiring to cope with rising costs and a subdued economic outlook.

“This data shows how uncertain many employers are feeling right now,” said Neil Carberry, chief executive at REC. “The good news is they still need to hire, as growing vacancies show. But firms are hedging their bets.”

Starting wages rose further in April as employers compensate new workers for higher living costs, the survey of 400 recruitment consultancies showed. It’s also a reflection of firms struggling to attract skilled candidates, particularly for permanent positions.

Accountancy

Engineering and accounting had the highest demand for permanent roles, while nursing and care and hospitality topped the rankings for temporary vacancies. Retail was the only sector to record lower demand for both short-term and permanent jobs.

However, there were signs of more people entering the candidate pool. Labour supply grew for a second straight month after steadily declining over the last two years. Most of the extra job-seekers are looking for permanent roles, following redundancies and hiring freezes. Some are also looking to switch jobs in search of better pay amid the cost-of-living crisis. London saw the highest rise in permanent job candidates.

“For businesses looking to hire there are some green shoots in candidate availability,” said Claire Warnes, skills and productivity partner at KPMG UK. “But skills shortages still dominate the market with no signs of progress.”