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UK - Permanent placements up, temporary billings fall

09 May 2013

The number of people placed in permanent jobs increased for a seventh successive month in April, with the rate of growth accelerating since March. However, temp billings declined for the first time in nine months.   

The Recruitment and Employment Confederation (REC) and KPMG Report on Jobs showed that the demand for staff continued to rise at a solid pace in April. Permanent staff vacancy growth inched up since March, but temporary vacancies increased at the weakest pace in nine months.

According to REC chief executive Kevin Green, “Demand in the economy is returning, slowly but surely. Businesses are feeling more confident, hence steady levels of people being placed into permanent jobs and rising in starting salaries across the north of England. It really is one in the eye for the naysayers who talk down our labour market and dismiss improving employment figures as being 'the wrong kind of jobs'.

“Recruiters are reporting a renewed sense of purpose from their clients, with employers making hiring decisions more quickly than before. Highly skilled jobs like engineering and IT are still big growth areas, and the reports of shortages of people to fill sales vacancies show that companies are gearing up for increases in business investment and consumer spending.

“All the feedback from recruiters is that employers intend to continue to increase their use of flexible staffing in the months ahead.”

April data pointed to an easing in the rate of inflation of permanent staff salaries, with the latest rise the slowest since last November. Temp pay growth also eased on the month.

Permanent staff availability was broadly unchanged in April, ending a four-month period of decline. Temp availability rose, but only modestly and at the slowest rate in 2013 so far.

The Midlands saw the strongest rate of permanent placements growth, followed by the South. London meanwhile posted a modest rise. The North registered stagnation. Temporary/contract staff billings rose in the Midlands and the North during April. In contrast, London and the South posted declines.

Public sector demand for staff declined, with reduced vacancies indicated for both permanent and temporary/contract workers. In contrast, private sector employees saw growth of demand, with the faster expansion reported for permanent staff.

The strongest growth in demand for permanent staff was signalled within the Engineering sector during April. IT & Computing workers also registered a marked rise in demand for their services. In contrast, there was a slight fall in demand for Hotel & Catering staff.

Seven of the nine monitored temporary/contract staff sectors saw improved demand in the latest survey period. The fastest increase was signalled for Nursing/Medical/Care workers, followed by Engineering personnel. Two sectors posted declines in demand, namely Construction and Hotel & Catering.

Bernard Brown, Partner and Head of Business Services at KPMG, said of the results:

“Negative news on the jobs front has been so commonplace in recent months that it has almost become a cliché.  The latest figures, however, hint at a positive turn with permanent placements accelerating, the rate of demand for permanent staff remaining solid and average starting salaries continuing to rise.

“Yet these positive signs should not be taken as a signal that we are reaching the proverbial pot of gold at the end of a rainbow.  The data suggests that optimism is lower when temporary roles are considered and there are also still too many inconsistencies across the UK to hint at recovery.  The reality is that there are likely to be storm clouds ahead before the employment rainbow will really be allowed to shine.”

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