Employers filling rising job demand with temps

Demand for workers remains high in the UK economy, though vacancies are increasingly being filled by temporary workers as companies hesitate to take on permanent staff.

Ongoing concerns over the economy have prompted permanent placements to fall for a fifth straight month in February 2023, with billings for temporary workers expanding to take up some of the slack, according to the latest Report on Jobs from KPMG and the Recruitment and Employment Confederation (REC).

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Despite employers’ reluctance to take on permanent staff, the number of job adverts hit a 14-month high in February, signalling companies’ confidence in their short-term prospects.

Claire Warnes, skills and productivity partner at KPMG UK said: “The current economic outlook continues to impact hiring activity as employers keep playing the short game by focusing on temporary hires.

“Despite the rate of vacancy growth picking up to the best recorded in four months, candidate shortages remain, with recruiters citing hesitancy to move roles and longstanding, systemic skills shortages. Nursing, care, and medical topped the rankings once again with the highest demand for workers, both temporary and permanent.”

Kate Shoesmith, deputy chief executive of the REC, said it made sense that companies were leaning on temporary hires while they worked out their prospects for the near future.

She said: “Temporary staffing ensures firms can continue to provide goods and services, and people can grow their careers, even when the economic outlook is unclear. 

“Demand for staff continued to expand across both the private and public sectors. The rising cost of living, plus difficulties attracting and securing suitably skilled staff are also driving increases in starting pay.”

Starting pay increases were higher for permanent staff than temporary staff in February.

To beat the competition in such a tight labour market, employers should look holistically at employee offering, according to Liz Sebag-Montefiore, director and co-founder of HR consultancy 10Eighty.

She told HR magazine: “When someone is looking for a new role, they will have a variety of reasons and requirements, but it seems that many workers want to align their personal aspirations and career ambitions with the mission and values of prospective employers.

“People want jobs that provide them meaningful work which resonates with their personal values and makes a difference on a broader scale.”

Good pay and conditions are not enough, however. She added: “You need to offer personalised career development to ensure a broad talent base that adds value and enables an organisation where people want to work because they have access to opportunities to gain valuable skills and experience to support their future.”

KPMG and REC's Report on Jobs collated data from around 400 UK recruitment and employment consultancies in February 2023. Job ad data was gathered in the REC's February Labour Market Tracker.