- Permanent placements and temp billings both rise, but at weaker rates
- Vacancy growth at four-month low
- Higher private sector demand for staff offsets public sector decline
- Permanent salary growth at 17-month high, albeit still modest
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.
Staff appointments rise at slower pace...
Recruitment consultancies signalled further increases in permanent placements and temp billings during February. However, in both cases the rates of expansion moderated. Permanent appointments rose at the slowest pace in the current five-month sequence of expansion, while short-term appointments increased at the weakest rate since last August.
...while vacancy growth softens
Overall demand for staff rose at the slowest rate in four months during February, although the pace of expansion remained marked. Slightly weaker increases were signalled for both permanent and temporary vacancies.
Faster increase in permanent salaries
Starting salaries for people placed in permanent jobs by recruitment consultancies rose further in February. The rate of inflation quickened to a 17-month high, although it remained modest in the context of historical data. Hourly pay rates for temporary/contract staff were little-changed, showing only a fractional rise.
Permanent staff availability down slightly; temp availability rises
The availability of candidates to fill permanent vacancies decreased for a third consecutive month in February, albeit marginally. Temporary/contract staff availability meanwhile increased for the second month running and at a modest rate.
Regional and sector variation
Growth of permanent placements was registered in all English regions during the latest survey period, with the North posting the fastest expansion and London the slowest.
The strongest growth of temporary/contract staff billings was signalled in the North during February. Increases in the Midlands and London were only marginal, while the South recorded a slight decrease.
Private sector permanent staff vacancies increased at the strongest rate since the start of the series in December 2011, while growth of private sector temporary vacancies was the sharpest in three months. In contrast, public sector demand for staff decreased, although for both permanent and temporary staff the latest falls were modest and weaker than recorded one month previously.
Latest data pointed to higher levels of demand for staff across all eight monitored categories during February. The strongest growth was signalled for IT & Computing workers, whereas the slowest expansion was indicated for Blue Collar employees.
Nursing/Medical/Care remained the most sought-after type of temporary/contract worker in February, as has been the case throughout the past 13 months. The seven remaining categories all saw vacancy growth, although rates of expansion were modest in the case of Executive/Professional and Hotel & Catering.
Bernard Brown, Partner and Head of Business Services at KPMG, comments: “For six months employment has been rising at such a rapid pace that it seemed to be outstripping economic growth. Amid the doom and gloom of recent High Street closures the jobs market made little sense, but the February figures suggest that uncertainty is beginning to reverberate in organisations across the country.
“Appointments may still be moving in a positive direction, but with the pace of recruitment dropping to its slowest pace for five months, it won’t be a surprise if hiring decisions are delayed further, putting candidates and employers in an unwanted state of limbo.
“The simple fact is that the jobs market cannot be viewed in isolation as employers will only step up recruitment if they are confident they can afford to take on new staff. Whilst retailers have reported improved performance at the cash tills during February, sustainable improvement in employment remains dependent on the growth of the economy as a whole. Until this happens we are likely to see a continuation of this scenario, where two steps forward are followed by one step back. In other words, recovery may be on the way, but it is a long path and one negotiated by very small steps.”
REC director of policy Tom Hadley said: “Competition for candidates intensified this month with private sector employers racing to secure the talent they need for growth from a decreasing pool of skilled workers. Starting salaries have risen to a 17 month high as companies realise they need to make more attractive offers to ensure they can persuade workers to join their workforce and not their rivals.
“There’s also noticeable demand for skilled staff to support infrastructure developments such as water and rail. With the Chancellor’s Budget only weeks away and more investment in infrastructure expected, a growing concern will be whether or not the UK has the skilled staff needed to get these projects off the ground.”
“This month saw increased demand for both temporary and permanent workers across all the sectors we measure, which is a really positive indicator for a continued recovery.”
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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 2010/11, some 1,049,333 people were employed in either temporary or contract work through consultancies and 604,193 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.
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A regional Report on Jobs series is now available comprising four regional reports tracking labour market trends across the Midlands, the North of England, the South of England and London. The reports are designed to provide a comprehensive and up-to-date guide to labour market trends and the data are directly comparable with the UK Report on Jobs.
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About Recruitment and Employment Confederation
15 Welbeck Street, London, W1G 9XT. Tel: 020 7009 2100. Fax: 0207 935 4112 Website: www.rec.uk.com
The REC is the professional body representing the UK’s £24.6 billion private recruitment and staffing industry with more than 8,000 recruitment agencies and 6,000 recruitment consultants in membership. There are more than 1 million temporary workers registered with UK agencies who are deployed in industry, commerce and the public services every day.
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