Permanent Placements Fall at Slower Rate, While Temp Billings Rise Slightly in August

Michelle Remo, “Big 4″ observer
September 10, 2012 /

Although permanent staff placements continued to fall in August, the latest drop was only modest and the weakest in the current three-month period of decline.

Recruitment agencies reported a rise in billings received from the employment of temporary/contract staff for the first time in nine months during August, albeit only slight.

Bernard Brown, partner and head of Business Services at KPMG Management Consulting, comments: “With question marks still hanging over the long-term state of the economy, it would be easy to suggest that an upward curve in the jobs market is nothing more than a blip. But the truth is that, in some parts of the country, we are actually seeing a growth in the number of companies recruiting and where there is a decline it is now virtually insignificant.

“It may be slow, but perhaps we are witnessing the first signs of recovery? Temporary placements are also on the up, so the hope must be that employer confidence is returning, that they are looking to the long-term and recruiting for growth.”

The availability of candidates to fill permanent and temporary positions continued to increase during August. However, in both cases the rates of growth eased.

Recruitment consultants indicated broadly flat pay trends in August. Permanent staff salaries rose only fractionally, while temp hourly pay registered a negligible decrease.

Lower permanent placements were registered in London and the North of England during August. In contrast, the Midlands saw a solid rise while the South posted a marginal expansion.

Growth of temporary/contract staff billings was fastest in the Midlands during the latest month. Expansions in London, the North and the South were only marginal.

Demand for staff from private sector employers rose further, with the stronger rate of expansion signalled for short-term employees. In contrast, the decline in public sector vacancies was extended, with temporary workers seeing the sharper fall.

Data showed that healthcare workers were the most sought-after type of employee during August.

Recruitment and Employment Confederation chief executive Kevin Green says: “This month’s data shows yet again the remarkable level of resilience within the UK labour market as it continues to outperform predictions.

“The World Economic Forum highlighted that one of the UK’s key competitive advantages is our job market flexibility – and it’s clear that being one of the most flexible labour markets in Europe has helped the UK avoid the high levels of unemployment experienced elsewhere on the continent.

“Recruiters tell us the first rise in the placement of temp workers in nine months is because employers are calling on that flexibility offered by agency staff as a way to grow to meet recent increases in demand, like that seen last month in the service sector. It’s also a sign that changes to Agency Worker Regulations last year have not resulted in any significant negative impact on the market for temporary labour as some predicted they would.

“Continued growth in candidate availability and vacancy growth are both good indicators for a recovery, although it’s too soon to say we’re out of the woods yet. We think the fall in people placed into permanent work for the past three months is down to a certain ‘stickiness’ in the recruitment process – employer confidence remains fragile and hiring decisions are taking longer than in boom times, slowing down the process of getting people into jobs.”

 

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