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England – Temp billings rise at strongest rate in 15 years

09 September 2013

Temporary/contract billing increased for the fourth consecutive month in August with the rate of expansion at its quickest pace since July 1998, according to a monthly report produced by Markit and sponsored by the Recruitment and Employment Confederation (REC) and KPMG.

Short-term staff availability deteriorated for the second month running in August, and at the sharpest rate in six years. The drop was centred in the Midlands and London, with the South seeing a slight rise and the North registering broadly no change. 

Bernard Brown, partner and head of business services at KPMG, commented: “With retail sales up and the OECD sharply increasing its growth forecast for the UK economy, it no surprise to see that confidence amongst employers is gaining momentum. Demand for staff has increased at its sharpest rate for over six years and whilst the thirst for permanent employment remains strong, the real success story revolves around the ‘return to work’ prospects offered by the surge in temporary and short-term placements.”

“With these roles seeing their fastest rise for 15 years, it means opportunities to get back into the labour market for people with other commitments are becoming more of a reality than a wish. If we continue on this trajectory it could also mean that Mark Carney will have to consider raising interest rates sooner than firth thought,” he added.

“It a trend that is being replicated across the country, and the demand for staff is good news for prospective employees. In the current marketplace organisations seem increasingly willing to pay more for top talent, with the latest figures showing the rate of starting salaries accelerating to a five-and-a-half year high. Increasing the pounds in a candidate’s pocket may sound like good news; it is – but employers must make sure they are paying the right price for the right person and not simply racing to fill a vacancy,” Mr Brown concluded.

The private sector continued to register a much stronger trend in demand for staff than the public sector during August. Marked rates in expansion were indicated for both permanent and temporary workers in the private sector. In the public sector, demand for permanent staff fell for a second consecutive month, while demand for temporary staff was moderately higher.

Engineering, Nursing/Medical/Care, and Construction jobs were the most in-demand sectors, although increased vacancy levels were broad-based across all nine temporary/contract staff sectors. The sharpest rise was signalled for Engineering workers. Hotel & Catering, Executive/Professional, and Accounting & Finance were the business sectors least in demand, despite year-on-year increases in demand.

Temporary/contract staff hourly pay rates rose for the seventh consecutive month in August. Although solid, the rate of inflation was slightly below July’s five-and-a-half year high. Recruitment agencies responding to the survey reported an increase in temporary/contract pay was generally attributed to higher demand for short-term workers. The Midlands reported the strongest rise in temporary/contract pay during August, while the North registered the weakest increase.   

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