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Temporary recruitment on the up as employers lose confidence in permanent hiring, says APSCo

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Demand for temporary workers in financial services and engineering continues to rise as the ongoing economic uncertainty puts hirers off recruiting permanent candidates, according to research by the Association of Professional Staffing Companies (APSCo).

Vacancies for temporary workers in accounting/finance and engineering rose for the third consecutive month - by 37% and 3% respectively in March.

Vacancies for temporary workers in accountancy/finance are still 35% below the level seen last March; while vacancies for temporary workers in the engineering sector are 5% higher than this time last year.

By contrast, vacancies for all professional-level temporary workers (bankers, lawyers, IT professionals etc.) declined by 1% in March and remains 10% below the level of March 2011.

According to APSCo, the permanent recruitment market is still lagging behind demand for temporary workers - evidence that hirers are nervous about the economy and are keeping a close eye on permanent headcounts.

Permanent vacancies for professional-level candidates fell by 3% in March, partially offsetting the rebound in the first two months of 2012. Permanent vacancies remain 20.5% below the level of March 2012.

The research is from the APSCo Monthly Trends Report, which analyses job vacancies and placements across the UK professional staffing sector. The report compares data from thousands of vacancies and placements supplied by APSCo members who place professional candidates within the UK.

Ann Swain, chief executive for APSCo, said: "The jobs market staged a rally at the start of the year, but has lost momentum over the past month. Demand for permanent candidates is still around a third down on last year. With the economy having flatlined during the past year it has been very difficult for employers to make all but the most essential hiring decisions."

"Understandably, with the outlook still uncertain, employers have turned to temporary workers to plug any immediate skills gaps. Temporary workers provide a flexible resource, allowing employers to deal with short term spikes in workload without having to add to fixed employment costs.

"The engineering sector continues to defy the uncertainty in the rest of the market. With infrastructure investment at record levels, and exporters benefitting from the weak pound, demand for engineers should remain buoyant for the duration of the year."

According to APSCo, demand for IT skills has tailed off after rising steadily at the start of the year - though again, demand for temporary workers and contractors is holding up much better than demand for permanent staff.