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UK – Temporary workers benefit from low business confidence

05 November 2012

The number of new temporary placements in the professional recruitment market increased by +4% in October when compared to a year ago although permanent placements fell by -2%, according to a joint report by the Association of Professional Staffing Companies (APSCo) and Staffing Industry Analysts.

Temporary workers in the marketing and media sector were most in demand with placements rising by +7%.

“We’re seeing a very continuous trend in the professional recruitment market towards the hiring of temporary staff in preference to permanent staff. Businesses still don’t have the confidence to make permanent hires when they can use temporary staff instead,” said Ann Swain, chief executive for APSCo.

Official figures last month showed that unemployment dropped surprisingly in the three months to August while the UK economy also grew +1% in the third quarter of the year, lifting the country out of recession.

“Hopefully the UK’s recent positive GDP figures will prove to be a shot in the arm for UK professional service firms, and lead to more confident permanent hiring of staff. Whilst an increase in temporary placements may not appear good news as permanent hires fall, the use of contract workers is offering a great deal of flexibility to both employers and employees,” said Ms Swain.

The research revealed that the majority of sectors were hit by salary cuts in the month with 21 of 36 industries posting a drop. The majority of new salaries decreased by under -10%, however graduates felt the pinch as their pay was down by -15%.

“Newly advertised graduate and trainee salaries have continued to fall, as the graduate job market becomes increasingly competitive. The number of graduates looking for a job is higher now than ever before, and employers can capitalise on the tough competition by offering lower starting salaries,” said John Nurthen of Staffing Industry Analysts.

Salaries in the public sector were also under pressure, falling by -31%. “This substantial fall is likely to be due to a higher percentage of new jobs advertised at junior levels and fewer new roles at senior management levels,” said Mr Nurthen.

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