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UK – Temporary billings continue to increase at a fast pace

09 January 2014

Demand for temporary staff quickened to its fastest pace in over 15 years, as the number of people placed in permanent jobs continued to increase during December, according to the latest Report on Jobs from the Recruitment and Employment Confederation (REC) and KPMG.

Bernard Brown, Partner and Head of Business Services at KPMG, commented: “Combine the latest job figures with news that business confidence has reached a new high and it’s easy to share the renewed sense of optimism amongst employers.  Permanent placements alone have hit a 4-year peak and with temporary hires accelerating to a 15-year high there is clearly room for corporate investment and, with it, job creation. Little wonder there is speculation suggesting Mark Carney might revise the unemployment benchmark at which an interest rate rise will be considered.” 

“The recovery is clearly gaining momentum, but it will remain delicate until exports show stronger growth.  As a result employers and individuals, alike, will be keeping an eye on interest rates and the impact any changes have on the pound in their pocket before deciding if a new job is the way to go.  Some uncertainty still remains because the availability of staff to fill roles has seen a steep fall – the biggest for almost 10 years.  It’s a particularly strong pattern in the Midlands and across London, and one which should be monitored carefully.  The risk is that if it continues employers who are desperate to fill a gap could become stretched beyond their means at the same time as over-inflating the market by offering high salaries just to tempt employees to move,” he concluded.

Agencies’ billings from the employment of temporary/contract staff increased further in December. Having accelerated since November, the rate of expansion was the sharpest in over 15 years. Survey respondents commented that the growth of temp billings reflected a combination of greater demand from existing clients and the securing of new contracts. The fastest growth of temp billings in December was recorded in the Midlands, while the North posted the second-sharpest rise.

The number of people placed in permanent jobs continued to rise in December. Moreover, the rate of expansion accelerated sharply since November to the fastest pace in 45 months. In fact, the latest increase was the third-strongest since the start of the survey in October 1997. Panellists commented that higher placements had been underpinned by markedly rising demand for staff. Mirroring the trend for temporary/contract staff, the Midlands registered the steepest increase in permanent placements during December, followed by the North.

The availability of staff to fill temporary/contract job roles eased slightly from November’s nine-year record low, the rate of decline availability remained substantial. Permanent candidate availability also reported a steep drop, its biggest since November 2004.

Salaries for temporary/contract staff rose at a solid pace that was slightly slower than in the previous month, with the average permanent starting salary growing at its fastest rate since October 2007. Temporary/contract pay growth was broad-based across all four English regions in December. The Midlands recorded the strongest rise, followed closely by London. All four English regions also posted marked increases in permanent salaries, led by the South. 

Demand for temporary/contract IT & Computing staff surged in December, followed by Nursing/Medical/Care and Accounting & Finance. Higher levels of demand were signalled in each of the nine staffing categories when compared with the last year. Demand also increased for all nine permanent staff categories. The strongest rate of expansion was signalled for Executive & Professionals workers, followed by Nursing/Medical/Care, and IT & Computing.

Some of the key temporary/contract skills in short supply are; finance, management accountants, analytical engineers, process design engineers, business intelligence, web developers, legal secretaries, and telesales. Among the key permanent roles in short supply are; Payroll, credit control, drivers, construction workers, telecoms, project managers, senior managers, business analysts, nursing, and sales.

The REC’s Head of Policy Kate Shoesmith, commented: “The UK labour market is starting the New Year in robust form. Our latest figures show sharp growth in the number of people finding new permanent jobs and the most rapid rise in starting salaries since October 2007. Increasing demand for temp workers has driven up hourly pay rates for agency workers for the eleventh month on the trot. Growing confidence means more and more employers are willing to invest in their workforce and take on more people.”

“The real concern now is the mismatch between demand and supply with recruiters reporting that they can’t source suitable candidates for vacancies in a whole range of sectors. Companies want to hire more salespeople, accountants and businesses development staff to help their enterprises grow, but can’t find people with the right skills to take the job,” she concluded.             

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