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UK – Employers turning to temporary workers to fill vacancies

06 August 2012

Employers in the UK are increasingly turning to temporary workers rather than permanent staff to fill vacancies as jobs in this sector were up by +7% in the past twelve months when compared to a -5% fall in permanent placements according to the latest monthly trends report for June/July from the Association of Professional Staffing Companies (APSCo) and Staffing Industry Analysts.

Actual professional-level placements are only increasing in the temporary sector, however the slump in permanent professional-level recruitment is far from the low last seen in December 2011  –  permanent placements were up +25%, and vacancies by +8% when compared to December.

“This switch from permanent to temporary recruitment demonstrates how the UK’s professional recruitment market can respond flexibly to changes in the broader UK economy,” said Ann Swain, Chief Executive for APSCo.

“With the deepest double dip recession in 50 years, and amid on-going uncertainty over the Eurozone, employers’ confidence has taken a real dive. Many have turned to temporary workers in order to maintain their capacity, whilst not yet committing to any longer term increase in their overheads.”

IT and finance are showing some signs of recovery in the permanent and temporary markets. While permanent placements in accountancy and finance are down -15% year-over-year, month-on-month figures reveal a slight improvement (+2%). In line with the trend in the wider recruitment market, these sectors are continuing to take on temporary staff – temporary IT placements rose +16% while accounting and finance placements were up +18% when compared to a year ago.

“IT and finance and accounting were two sectors hardest hit by the recruitment slump at the end of 2011. It could be that businesses in these sectors had put the brakes on their hiring, but subsequently found that they needed to bolster their workforce to handle spikes in demand for their services,” Ms Swain said.

Not all permanent sectors are in decline as the engineering sector is bucking the UK-wide trend, seeing an +11% increase in permanent hiring over the last year, while temporary placements fell -5%. Media and marketing also profited from an increase in permanent placements (+9%) and temporary placements (+8%).

The data also shows a notable slowdown in London’s professional staffing sector, mainly due to the collapse in banking recruitment. Overall, the UK’s professional staffing sector contracted by -5% with London seeing the biggest fall in hiring (-13%).  Recruitment activity in the banking and insurance sector was down -32% in London and down -29% across the UK from a year ago.

 “London is the UK’s financial services hub, so any slowdown in the sector will inevitably be felt hardest there. With pressure on banks to shore up capital reserves, many have put recruitment on ice for the time being at least,” said John Nurthen, Executive Director at Staffing Industry Analysts.

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