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Permanent hiring increasing, but rate of growth slowing, finds REC/KPMG

HR Editorial , 09 May 2012

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Permanent staff placements increased in April, continuing the trend seen since the start of 2012, according to The Recruitment and Employment Confederation (REC) and KPMG Report on Jobs published today.

But the rate of growth was modest and the slowest since January.

Higher placements were supported by a further solid increase in demand for staff.

Agencies' billings from the employment of temporary/contract staff fell again in April. Although only slight, the rate of contraction was nevertheless the fastest since July 2009. The number of vacancies available to people seeking short-term work meanwhile increased, but at the weakest rate since September 2009.

April data pointed to a slight deterioration in the availability of candidates for permanent jobs, bringing an end to the previous 14-month sequence of growth. Temporary/contract staff availability continued to rise, albeit at the weakest rate for almost a year.

Permanent staff salaries continued to show a broadly flat trend in April, posting a fractional fall on the month. Hourly rates of pay for temporary/contract staff were up modestly.

Kevin Green, chief executive of the Recruitment & Employment Confederation, said: "This month's figures show growth in permanent jobs but at the slowest level since January. This highlights the fragile nature of the UK jobs market at present. Employer and consumer confidence are increasing and we anticipate more private sector jobs being created in the second half of the year. 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.

"During 2011, employers made do with the staff they had, trying to exploit any additional capacity in their existing workforce. Having maximised the growth they could achieve in this way, confidence has grown sufficiently for organisations to make the positive decision to take on more staff.

"This growth is fragile though, and reports of a double dip recession and crises in the Eurozone could have a negative impact on that confidence."

 

Bernard Brown, partner and head of business services at KPMG, added: "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.

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

"With the recent economic data in the UK and continued global economic uncertainties, the situation is unlikely to improve. Unemployment rates are likely to continue to rise in the short term. The question, now, is whether we start to push the 3 million mark."

 

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