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Recruitment market shows improvement, according to REC and KPMG

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February showed strong and accelerated rises in the recruitment of both permanent staff placements and temporary staff, according to the latest REC/KPMG findings.

Higher staff appointments were underpinned by robust growth of demand for staff in February. The overall level of job vacancies increased at the strongest rate since April 2010. The availability of candidates to fill job vacancies was reported to have increased in the latest survey period. Growth of temporary staff availability remained notably stronger than that of permanent workers. but the rate of inflation of permanent staff salaries eased to a three-month low in February and remained below the survey's long-run average. Temporary staff hourly pay increased modestly. Kevin Green, REC chief executive, said: "The UK now has a two-speed labour market. The private sector continues to hire in increasing numbers while the public sector is shedding jobs. This is highlighted in the latest Report on Jobs which reports that the nursing, medical and care sectors have significantly declined from a year ago. In comparison, the IT and computing sector saw accelerated growth over the same period.

"We anticipate that unemployment will increase over the spring, summer and autumn before very slowly starting to decline at the very end of this year and into 2012. The scandal within the UK jobs market is that nearly one million young people - over 20 per cent of 16 to 24 year olds - are not in work or education. Young people seem to be excluded from the growing number of vacancies as employers remain conservative, favouring experience over potential.

"The REC is calling on the Government to unleash the job creation potential of SMEs and tackle youth unemployment in its forthcoming enterprise budget. A National Insurance holiday of at least one year for every young person employed by a smaller company is an obvious win-win for both business and jobseekers." Bernard Brown, partner and head of business services at KPMG, added: "The encouraging trend which started in January continued last month with permanent placements rising at their fastest rate in 10 months and temp billings showing their strongest increase since May 2007. Employers in the IT & Computing and Engineering & Construction sectors are again those most actively recruiting. This might be an indication that a private sector led recovery is indeed under way.

"What the Government needs to do now is to support growth. It needs to encourage private sector investment into the provision of public services to mitigate the cuts and job losses we are expecting across the public sector. It also should continue to help and promote British exports in order to enable UK manufacturers to expand globally which many of them will need to do in order to survive."