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UK – Permanent placements hit 45-month low due to Brexit uncertainty

08 July 2016

The number of people placed in permanent positions in the UK fell in June as evidence pointed to uncertainty in the lead-up to the EU Referendum (data collected from 13-24 June) having an impact. It was the first decline in 45 months, according to the most recent Markit/REC (Recruitment and Employment Confederation) Report on Jobs.

The report also showed that although temporary/contract staff billings continued to increase in June, the rate of growth eased to a nine-month low with respondents frequently pointing to Brexit uncertainties.

“Uncertainty during the run-up to the referendum saw many employers suspend permanent hiring and instead bring in temporary, contractor or interim staff to hedge against potential changes to their growth prospects,” Kevin Green, REC Chief Executive, said.

“Whilst it is too early to assess what the impact of the vote to leave the EU will be on jobs, our data underlines the need for uncertainty to be minimised so that our economy and our labour market are not adversely affected,” Green said. “The best thing for business right now is clear and calm leadership and as much clarity as possible on what the post-EU future will look like.

The report also pointed to a further easing of permanent salary growth with the latest increase being the least marked since September 2013. Temp pay also rose at a slower pace, hitting a three-month low.

The availability of staff continued to fall in June. Permanent candidate supply decreased at a marked pace that was sharper than in May, whereas temp availability fell at the slowest rate in 33 months.

Among the regions, London saw a further drop in permanent placements, with the rate of decline the sharpest since December 2012. Scotland saw broadly unchanged placements, while the Midlands and South registered weakening rates of growth. The North posted the strongest increase overall.

Agencies in the South of England reported stagnant temp billings during June, while slower increases were recorded in the Midlands, North, London and Scotland.

Higher demand was signalled for both public and private sector vacancies. The stronger growth was indicated for the latter, with private sector temporary workers seeing the fastest increase overall.

Engineering staff recorded the strongest growth in permanent vacancies of the nine monitored categories followed by Nursing/Medical/ Care.

Nursing/Medical/Care workers saw comfortably the sharpest rise in temporary vacancies during June, with Hotel & Catering staff in second place. The weakest growth was signalled for Executive/ Professional staff.

“We are consulting our members and so far it is clear that for recruiters the best way to ensure the continued health of our labour market, and the economy that relies on it, is by maintaining membership of the single market and access to skills across the EU,” Green said.

“Before the referendum, businesses were already finding it increasingly hard to source the right candidates,” Green said. “Ensuring employers can still access the people they need to succeed must now be top of the list in any negotiations.”