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UK – Hiring slows with temporary billings falling

08 August 2012

The UK labour market has shown some signs of improvement with unemployment falling despite the economy slipping back into recession. But uncertainty remains as companies scaled back hiring intentions in July with both temporary and permanent billings falling, the latest report on jobs by the Recruitment and Employment Confederation (REC) and KPMG shows today.

“We have always said that we expected to see ups and downs in the employment figures rather than a continued sustained period of jobs growth,” said REC chief executive Kevin Green.

“What must be emphasised, though, is that employers are still hiring. In fact, the number of vacancies has grown, but fragile confidence means they are taking longer to make decisions about appointments and the whole process of recruiting is slowing down.”

Temporary staff appointments fell for the eighth consecutive month in July, but the pace of contraction eased with some respondents explaining that some contracts had come to an end were simply not replaced. Short-term staff billings rose in the Midlands and the South, offsetting falls in London and the North of England.

Demand for staff reached a six-month low in July, particularly for permanent staff while there was a slightly faster increase in demand for temporary workers. The private sector fared better, seeing “robust” improvements in demand for both permanent and temporary employees. Demand for staff in the public sector dropped, affecting permanent workers more than temporaries.

“After so much debate surrounding employment prospects across public services there is, at least, some good news with higher demand across private businesses offsetting the slowdown in public sector recruitment,” said Bernard Brown, Partner and Head of Business Services at KPMG.

“Yet, the real story of recovery will also probably only start to emerge in the autumn as the true impact of the Olympics begins to emerge. Given that the latest data shows that the sharpest drop in permanent placements was registered in London, questions remain around how businesses in the Capital will look to grow and expand after the summer lull in activity.”

The report also showed that contingent workers were hotly sought after in the Nursing/Medical/Care sector, this reaching a seven-month high. Engineering and Construction workers also benefited from job growth while Accounting and Financial workers saw a sharp drop.

Staff availability among temporary workers continued to rise in July with London posting the steepest rise and the South noting a slight deterioration. In the month, salaries for temporary workers fell slightly and mainly affected London and the North of England. 

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