Report on Jobs: Permanent placements fall at slower rate, while temp billings rise slightly in August 

Key points:

• Decline in permanent staff appointments eases

• Temporary staff billings increase for first time in nine months

• Job vacancies continue to rise

• Nursing/Medical/Care workers are most sought-after

• Rising candidate availability subdues 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. 

Decline in permanent placements eases

Although permanent staff placements continued to fall in August, the latest drop was only modest and the weakest in the current three-month period of decline.   

Modest increase in temp billings

Recruitment agencies reported a rise in billings received from the employment of temporary/contract staff for the first time in nine months during August, albeit only slight. 

Staff availability rises at slower pace

The availability of candidates to fill permanent and temporary positions continued to increase during August. However, in both cases the rates of growth eased.  

Salaries show little change

Recruitment consultants indicated broadly flat pay trends in August. Permanent staff salaries rose only fractionally, while temp hourly pay registered a negligible decrease.

Regional and sector variation

Lower permanent placements were registered in London and the North of England during August. In contrast, the Midlands saw a solid rise while the South posted a marginal expansion.  

 
Growth of temporary/contract staff billings was fastest in the Midlands during the latest month. Expansions in London, the North and the South were only marginal.

Demand for staff from private sector employers rose further, with the stronger rate of expansion signalled for short-term employees. In contrast, the decline in public sector vacancies was extended, with temporary workers seeing the sharper fall.

Data showed that healthcare workers were the most sought-after type of employee during August.

Comments:

Bernard Brown, partner and head of Business Services at KPMG Management Consulting, comments: “With question marks still hanging over the long-term state of the economy, it would be easy to suggest that an upward curve in the jobs market is nothing more than a blip.  But the truth is that, in some parts of the country, we are actually seeing a growth in the number of companies recruiting and where there is a decline it is now virtually insignificant.

“It may be slow, but perhaps we are witnessing the first signs of recovery?  Temporary placements are also on the up, so the hope must be that employer confidence is returning, that they are looking to the long-term and recruiting for growth.”

Recruitment and Employment Confederation chief executive Kevin Green says: “This month’s data shows yet again the remarkable level of resilience within the UK labour market as it continues to outperform predictions.

“The World Economic Forum highlighted that one of the UK’s key competitive advantages is our job market flexibility – and it’s clear that being one of the most flexible labour markets in Europe has helped the UK avoid the high levels of unemployment experienced elsewhere on the continent.

“Recruiters tell us the first rise in the placement of temp workers in nine months is because employers are calling on that flexibility offered by agency staff as a way to grow to meet recent increases in demand, like that seen last month in the service sector. It’s also a sign that changes to Agency Worker Regulations last year have not resulted in any significant negative impact on the market for temporary labour as some predicted they would.

“Continued growth in candidate availability and vacancy growth are both good indicators for a recovery, although it’s too soon to say we’re out of the woods yet. We think the fall in people placed into permanent work for the past three months is down to a certain ‘stickiness’ in the recruitment process –  employer confidence remains fragile and hiring decisions are taking longer than in boom times, slowing down the process of getting people into jobs.”           

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

Ends

For further information, please contact:

Mike Petrook, KPMG Press Office
020 7311 5271 (t), 07917 384 576 (m) or mike.petrook@kpmg.co.uk

Markit Economics (technical/data queries):

Jack Kennedy, Telephone 01491 461087

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.

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.

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.

KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 11,000 partners and staff.  The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  KPMG International provides no client services.