· 2 min read · News

Further reductions in recruitment numbers in July, finds REC/KPMG


Although there were further reductions in both permanent and short-term staff appointments during July, in both cases the rates of decline eased slightly since June, according to The Recruitment and Employment Confederation (REC) and KPMG Report on Jobs

The report published yesterday, revealed the number of vacancies available to jobseekers continued to increase during July, but the latest improvement was the least marked for six months.

Recruitment consultants indicated that the availability of staff continued to rise in July. Solid improvements in both permanent and temporary/contract staff availability were recorded.

Average starting salaries for people placed in permanent jobs increased modestly during July, but the rate of inflation remained historically weak.

Hourly rates of pay for temporary/contract staff fell slightly.

July data showed that permanent placements fell in all English regions with the exception of the Midlands, where no change was recorded. The steepest decline was registered in London. Short-term staff billings fell in London and the North of England during July, offsetting rises in the Midlands and the South.

Vacancy data showed that higher demand from private sector employers offset a further decrease in public sector demand. By category, Engineering/ Construction and Nursing/Medical/Care were the most sought-after types of staff.

REC chief executive Kevin Green said: "The UK's labour market deserves a gold medal for its incredible performance in the face of adversity so far this year. In the last few months, it has defied gravity as unemployment has fallen and jobs grew even while the economy slipped back into recession.

"But this run might be coming to an end as this month's data shows that permanent appointments have fallen for a second month and temporary employment has seen an eighth consecutive month of contraction. However, we have always said that we expected to see ups and downs in the employment figures rather than a continued sustained period of jobs growth.

"What must be emphasised, though, is that employers are still hiring. In fact, the number of vacancies has grown, but fragile confidence means they are taking longer to make decisions about appointments and the whole process of recruiting is slowing down. This slow-down is likely to be exacerbated further by thousands of school and university leavers joining the jobs market over the next month.

"On a positive note, there are some sectors that are defying this month's decline and continuing to experience significant demand for staff, most notably engineering, computing and healthcare."

Bernard Brown, partner and head of business services at KPMG, added: "Only a few weeks ago there was an audible sigh of relief across the UK's workforce as official employment figures indicated signs of improvement.

"However, my concern is that any sigh of relief may be mistaken for a groan of exasperation, because the rate at which employers are recruiting has decreased for the second consecutive month, and this suggests that there is still a high degree of uncertainty. It is also likely that the 'Olympic effect' is combining with the traditionally quiet summer period for job hunters.

"After so much debate surrounding employment prospects across public services there is, at least, some good news with higher demand across private businesses offsetting the slowdown in public sector recruitment. Yet, the real story of recovery will also probably only start to emerge in the autumn as the true impact of the Olympics begins to emerge. Given that the latest data shows that the sharpest drop in permanent placements was registered in London, questions remain around how businesses in the Capital will look to grow and expand after the summer lull in activity."