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Expansion of recruitment continues to slow according to REC and KPMG

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Increases in both permanent staff placements and temporary/contract staff billings, continued to slow down during June according to The Recruitment and Employment Confederation (REC) and KPMG Report on Jobs, published today.

The latest expansions were the least marked for 22 and eight months respectively.

Permanent staff vacancies rose at the slowest pace in six months, while short-term staff vacancies increased at the weakest rate since November 2010. Recruitment consultants also signalled a further weakening of pay pressures in June. The rates of inflation of both permanent staff salaries and temporary/contract staff wages were only marginal. Staff availability showed a further moderate improvement in June. Faster rates of growth were recorded for both permanent and temporary/contract candidate availability.

Kevin Green (pictured), chief executive of the REC, said: "Jobs growth has slowed to a 22 month low but we remain optimistic that the private sector can absorb public sector cuts. Although there has been a deceleration in the rate of growth, the UK jobs market is resilient and we are not expecting a double dip in employment. Recruitment consultants reported an overall increase in the number of people placed into permanent jobs in June. This ties in with last month's official jobs figures and means that we have now seen 23 months of continued expansion in permanent job placements.

"Looking ahead, we are unlikely to see a dramatic upswing in employment until the middle of 2012. However, the slow and steady increase in private sector hiring should mean that workers leaving the public sector have possible job outlets.

"Effective support and guidance will be essential for workers making this transition. In addition, a key priority for public bodies must be to ensure that staffing levels are adequate for the delivery of frontline services. The significant drop in the use of temporary and locum staff within the NHS raises real concern over the potential lack of support and back-up for already overworked healthcare staff."

Bernard Brown, partner and head of business services at KPMG, said: "There has been a marked deterioration in the UK jobs market with permanent placements growing at their weakest rate in almost two years.

"Employers across all sectors are very cautious about hiring new staff - and a quick job market recovery in the UK now looks increasingly uncertain.

"With the continuing pressure of higher energy costs for businesses - and uncertainty about the strength of export markets in key Eurozone countries - most private sector companies are increasingly focused on keeping their cost base low.

"The public sector job market remains very slow - with little sign of a pick-up in the near future."