Report on Jobs - Permanent placements rise for first time in four months 

Key points:

• Modest increase in permanent appointments recorded
• Temp billings down slightly
• Candidate availability rises, but at slower rate
• Subdued pay pressures

Summary:

The Recruitment and Employment Confederation (REC) and KPMG Report on Jobs – published today – provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies. 

Slight increase in permanent placements but temp billings down

Permanent staff appointments rose for the first time in four months during January, albeit modestly. However, agencies’ temporary/contract staff billings fell slightly for the second month running, with a number of panellists commenting on the impact of Agency Worker Regulations.  

Weaker rise in demand for staff

Recruitment consultants reported a slower increase in job vacancies during January. Growth of overall demand for staff eased to the weakest for 27 months. Data suggested that Engineering/ Construction workers were the most sought-after in the latest survey period, in contrast to declines in demand signalled for Hotel & Catering staff. 

Growth of candidate availability slows

The availability of staff to fill job vacancies continued to rise in January. However, growth of both permanent and temporary/contract staff availability eased from the strong rates recorded in December.  

Pay pressures remain muted

Permanent staff salaries rose only marginally in January and at a much slower pace than the long-run series average. Hourly rates of pay for temporary/contract staff increased modestly following a slight decline in December.

Bernard Brown, Partner and Head of Business Services at KPMG comments:   “Given the continued impasse surrounding the Eurozone and the knock on effect this has on business confidence, it is a welcome surprise to see a modest increase in the number of permanent job placements across the UK.  Perhaps employers are beginning to accept that they need to have the right people in place to kick start the economy?

“Sadly, though, the number of people hoping to fill these vacancies continues to rise and with unemployment benefit claimants up for the tenth month in succession, the competition to be the right candidate in the right place is tougher than ever. 

“At least there are signs within some industries that things are looking up. Amongst the engineering, construction and IT sectors demand for permanent staff has increased since the turn of the year. With so much attention being paid to these sectors at the moment, close attention should be paid to see if this is a trend set to continue as the year progresses.”

Kevin Green, Chief Executive of the Recruitment & Employment Confederation, says: “This month’s Report on Jobs highlights that there are glimmers of hope for the UK jobs market with permanent placements increasing for the first time in four months. This is the first positive indicator for some time that employers are looking to hire staff despite the ongoing weakness of the economy. It is particularly encouraging that six out of eight sectors surveyed show growth in demand, including engineering, IT and office professionals. The Report on Jobs also follows better than expected services data from the Purchasing Managers’ Index last Friday, which suggests that confidence is growing amongst consumers as well as businesses.

“Although temporary billings have contracted slightly over recent months, the latest figures show an improvement on December. This confirms that there is still little evidence that the Agency Workers Regulations have had a significant impact on hiring and employers are still making considerable use of flexible working arrangements.

“A major challenge in the jobs market is the disconnect between what employers are looking for and what jobseekers can offer. Better careers guidance is part of the solution, as is increased use of apprenticeships to get young people into employment with vocational skills development.”

Full reports and historical data from the Report on Jobs are available by subscription. Please contact economics@markit.com

For further information, please contact:

KPMG

Mike Petrook, KPMG press office, 020 7311 5271 or 07917 384 576

REC

Helen Ablett, Telephone 08453 700655  

Markit Economics (technical/data queries)

Paul Smith, Telephone 01491 461038

Note to Editors:

The Report on Jobs is a monthly publication produced by Markit on behalf of the Recruitment & Employment Confederation and KPMG. The report features original survey data which provide the most up-to-date and comprehensive monthly picture of recruitment, employment and employee earnings trends available.

The Report features original research data from Markit, collected via questionnaire from a panel of 400 UK recruitment and employment consultancies. In 2000, some 1,326,000 people were employed in either temporary or contract work through consultancies and over 450,000 people were placed in permanent positions through consultancies. Data for the monthly survey were first collected in October 1997 and are collected at the end of each month, with respondents asked to specify the direction of change in a number of survey variables.

All Index numbers are calculated from the percentages of respondents reporting an improvement, no change or decline. These indices vary between 0 and 100 with reading of exactly 50.0 signalling no change on the previous month. Readings above 50 signal an increase or improvement; readings below 50 signal a decline or deterioration. Reasons given by survey respondents for any changes are analysed to provide insight into the causes of movements in the indices and are also used to adjust for expected seasonal variations.

Markit do not revise underlying survey data after first publication, but seasonal adjustment factors may be revised from time to time as appropriate which will affect the seasonally adjusted data series. Historical data relating to the underlying (unadjusted) numbers, first published seasonally adjusted series and subsequently revised data are available to subscribers from Markit. Please contact economics@markit.com.