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UK – Temporary billings decline as job market frustration continues

09 May 2012

In April, temporary billings fell at the fastest rate since July 2009 while the number of temporary vacancies available increased at the weakest rate since September 2009. Constrained client budgets and weaker public sector demand for short-term staff are to blame, finds the latest Report on Jobs by the Recruitment and Employment Confederation and KPMG.

“Temporary staffing is declining as employers take on more permanent staff and come to terms with the agency workers regulations. However, temps will continue to be a valuable resource for many businesses,” said Kevin Green, chief executive of REC.

Especially the South of England saw a decline in temp billings while London only recorded a marginal fall. Regions that saw growth in the temporary staffing industry included the Midlands and the North. Pay rates also improved for temporary workers, a side-effect of the Agency Worker Regulation, while London was the only region to report a decline in salaries for temporary or contract employees.

The Nursing/Medical/Care sector showed a particularly high demand for temporary employees while lower demand was recorded in the Executive/Professional, Hotel & Catering and Accounting/Financial sectors.

Although temporary jobs were down, permanent vacancies were up in April due to improved client demand – but the growth rate was the slowest since the beginning of the year. Again, the Midlands saw the sharpest growth of placements while London did not fare well, seeing a further reduction.

“The job market mirrors the frustration of April showers spilling into May. At first glance it is encouraging to see permanent job opportunities continue to improve, but there has also been a sharper decline in temporary placements,” said Bernard Brown, Partner and Head of Business Services at KPMG.

“One ray of sunshine amidst the gloom is the Midlands, where engineering and construction opportunities have grown for the past six months.”

But Mr Brown warned that the ongoing global economic uncertainties are not likely to improve and he predicts a rise in UK unemployment in the short term. Unemployment in the UK is currently 8.3% or 2.65 million.

But a Department for Work and Pensions spokesman was more positive and said that "The Government is focusing on stabilising the public finances, supporting economic growth and helping the unemployed in these tough times. Last month we saw unemployment fall […] Our Work Programme is helping people into work and our Youth Contract includes extra apprenticeships and support for young people to help improve people's chances in the jobs market.”

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