Growth of permanent placements drops to 18-month low

The number of permanent placements increased in November but at the slowest rate for 18 months, according to the latest monthly report by KMPG and the Recruitment and Employment Confederation (REC).

The November Report on Jobs is based on a questionnaire of a panel of 400 UK recruitment and employment consultancies. It suggests 33% of employers hired more permanent staff in November than in the previous month, compared to 44% in October.

The number of temporary placements increased across the same period. In November, 39% of employers hired more temporary workers than the previous month. This is up 5 percentage points from October.

One possible reason for the stalling growth of permanent placements is the continued lack of available candidates. Employers and recruiters have reported the numbers falling every month this year.

In November the number of available candidates fell again, with 44% of respondents reporting they had fewer candidates to choose from compared to October. Only 8% said they saw an increase.

KPMG partner and head of business services Bernard Brown warned there is "not much sign of a happy Christmas" in the job market.

"With political uncertainty in the UK, and in particular the country's position on Europe, could this be the start of a negative trend in the jobs market?" he asked.

"Let’s hope not and that the initiatives announced in the autumn statement convert to new employment opportunities."

REC chief executive Kevin Green added that, despite a strong year for the labour market, if there's one "cloud on the horizon" for 2015 it's "intensifying skills shortages".

"It’s not just about graduates, vacancies for skilled manual jobs are getting harder to fill as well," he said. "The shortage of licensed HGV drivers and forklift operators could mean retailers struggle to meet the Christmas demand."

“In the longer term, skills shortages could jeopardise delivery of major infrastructure projects announced in this week’s autumn statement," he warned.