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UK — Permanent placements grow at fastest pace since July 2007

03 March 2010

According to the latest monthly recruitment industry survey for February published by the Recruitment and Employment Confederation (REC) and KPMG, growth of permanent staff placements accelerated in February, reaching its strongest pace since July 2007. Temporary/contract staff billings also increased, although the latest rise was the slowest in three months.

Overall demand for staff continued to increase in February, extending the current period of growth to five months. The pace of expansion accelerated again, reaching its fastest for just over two-and-a-half years. Sharper increases in demand were recorded for both permanent and temporary/contract staff.

Although still moderate relative to the survey's long-run trend, the rate of inflation of permanent staff salaries accelerated to a twenty-month high in February. Temporary/contract staff hourly pay rates rose marginally for the second month running.

The supply of candidates to fill vacancies continued to rise in February, but at a slower rate. The latest increases in both permanent and temporary/contract staff availability were the weakest since April 2008.

The number of people placed in permanent jobs by recruitment consultancies increased again in February, extending the current period of growth to seven months. Furthermore, the rate of expansion accelerated to the strongest in just over three-and-a-half years. Around 43% of panellists reported a rise in placements, twice the proportion that signalled a fall. Anecdotal evidence suggested that growth was underpinned by increased client confidence and improving market conditions.

Agencies' billings from short-term staff employment continued to rise in February, amid reports from panellists of higher vacancy levels. However, the rate of expansion eased to the slowest since last November. Comments from the survey panel suggested that growth had been constrained by some clients opting not to renew contracts.

Kevin Green, the REC's Chief Executive, says "the UK jobs market is continuing to improve. Increasing employer confidence has resulted in the best performance we've seen in permanent employment for two and a half years. High-end sectors such as IT are showing particularly strong growth and we are also seeing significant increases in demand for admin and back-office support."

"Looking ahead, there are indications that recruitment in the public sector could drop off fast. A new approach to public sector resourcing is now critical and will have a direct impact on the wider employment outlook."

"We question whether the public sector has the right capability in place to lead the necessary transformation and put in place staffing structures that will keep costs down while improving public services. Rather than responding with random job cuts, the public sector needs to embrace radical reform. Flexible working must be seen as part of the cost solution, rather than the problem."



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