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UK – Temp billings rise, pay increases moderately in March

09 April 2013

Staffing firms in the UK report that employers are prepared to pay higher starting salaries to get the right candidate, but firms still struggle to find people with the right skills and experience as candidate availability declined last month.

The latest job report by the Recruitment and Employment Confederation (REC) and KPMG found that salaries for permanent and temporary workers both increased at “moderate” rates in March.  But the availability of candidates to fill permanent job roles decreased for a fourth successive month in March. At the same time, more temporary and contract staff were available to take up work in the month.

“The fact that in March more people secured jobs than in the previous month is obviously good news, although the rate of growth has slowed. However the most significant issue is the emergence of a two speed labour market with a lack of candidates for highly skilled roles at the same time as persistent levels of unemployment,” said REC chief executive, Kevin Green.

“It’s a worrying trend that is particularly problematic across IT and engineering and at senior levels in other sectors.  Persistent skills shortages in these areas could have a disastrous impact on critical infrastructure projects.”

While both permanent and temporary staff placements rose during March, the increase was only slight and the slowest in six and seven months respectively. Job vacancies reached a seven-month low with demand for permanent and temporary workers rising at weaker rates. 

Nonetheless, the nursing, medical and care sector posted the highest demand for temporary workers during March. This was followed by the engineering/construction, financial/accounting and IT industries. Demand for temporary hotel & catering staff fell for the first time in six months.

Increased temporary billings were signalled in the Midlands, North and London during March, whereas the South posted a marginal fall. The private sector continued to increase vacancies for temporary workers while in the public sector, demand for temporary workers increased for the first time in three months.

Bernard Brown from KPMG said the job market was catching up. “Perhaps, once the measures announced in last month’s Budget start to take effect, we may see a positive impact on business confidence, but there is a long way to go and forecasts for a flat GDP for the rest of the year do not bode well.”

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