The latest KPMG and REC ‘UK Report on Jobs' survey compiled by S&P Global found that a sharper fall in permanent staff appointments and a fresh decline in temporary billings signalled a "broad-based reduction" in hiring activity last month.
Permanent job placements fell at the second-fastest rate since June 2020, while temporary hires returned to a decline after two months of growth.
However, the survey found that the fall in temporary placements was milder compared to the decline observed in permanent hires, as some employers opted for the flexibility offered by contract workers in the current economic landscape.
Pay growth eases as UK starting salary inflation drops to two-and-a-half-year low
Wage pressures, a measure closely watched by the Bank of England, have continued to ease, with recruitment consultancies signalling a further slowdown in the rate of starting salary inflation.
Salaries for permanent employees rose sharply, but the increase was the smallest since March 2021 and fell below the long-term trend of the series, while temporary wages experienced the slowest growth in 33 months.
KPMG and REC found that although the demand for skilled workers continued to drive overall pay upward, reported budget constraints among employers have constrained overall growth.
The slowdown in hiring and reports of layoffs pushed up the availability of workers for the ninth consecutive month in November, with both permanent and temporary staff supply rising at the sharpest rates since December 2020.
As the supply of candidates rose, overall demand for staff weakened slightly in November, after stabilising in October. The survey found this marked only the second time that total vacancies had fallen since February 2021.
Underlying data revealed a slight decline in permanent job openings for the third consecutive month, while the increase in demand for temporary workers remained notably subdued compared to historical trends, showing only modest growth.
Bank of England holds rates at 5.25% in 5-4 split vote
"The balance of supply vs demand is out of sync: we are seeing even more people looking for work, with candidate supply rising at the fastest pace since the initial pandemic wave three years ago, but the number of available roles falling again in November," said Claire Warnes, partner at KPMG UK.
"Businesses want to plan for the year ahead, but the prospect of faltering UK economic growth means the certainty they need is not there. This is now impacting starting salaries, as pay inflation is not as sharp as in previous months."
Neil Carberry, REC chief executive, added: "2023 has been a testing year in our labour market, with permanent hiring dropping and temporary hiring flat or growing only a little.
"That is the story again in this month's data, though the market is quieter overall as firms start to move activity into 2024 rather than pressing ahead now."