South of England’s Permanent Staff Placements Continues to Strengthen

July 09, 2012 /

The South of England’s recruitment agencies indicated that permanent placements increased for the seventh month running in June. Moreover, the rate of growth accelerated for the second straight month to a solid pace. Consultants’ billings from temp employment fell for the fifth successive month, however. Furthermore, the pace of contraction was the second-fastest in over three years.

The South of England was the only English region to record permanent appointment growth in June, but posted the second-steepest drop in temp billings. Permanent placements fell in each of the monitored regions bar the South in June, with London seeing the steepest reduction overall. The Midlands was meanwhile the only region to recorded higher temp billings, with notable decreases in the North and South.

June data signalled a third successive month-onmonth fall in the number of candidates available to fill permanent job vacancies in the South of England. The rate of reduction eased from May’s 51-month record, however, and was the slowest seen over the second quarter.

The South of England registered higher numbers of candidates available for temporary roles in June. The current sequence of rising temp availability now stretches to 51 months. The rate of expansion remained modest, however, and was the slowest since December 2011.

The South of England registered a sharper fall in permanent staff availability than that seen in the only other region to post a decline – the Midlands. The South recorded the weakest growth in temp availability of all four English regions. Robust increases in the number of candidates seeking permanent jobs in the North and London during June contrasted with slight falls in the Midlands and South. The North and London meanwhile led a broad-based increase in temporary staff availability.

New starters in permanent jobs in the South of England registered a slight fall in salaries on average in June. This was marked the first reduction since last December. The rate of decline was only modest overall, despite the respective index falling to a 33-month low. Hourly rates of pay for staff in temporary/contract employment rose in June. Temp pay has increased 16 times in the past 17 months, but the latest increase was only fractional.

Of two English regions to post falling permanent salaries in June, the other being London, the South recorded the stronger rate of decline. The Midlands and North saw modest rises in permanent starting salaries. The Midlands also saw an increase in temp hour rates, and one that was faster than in the only other region to see a rise, the South.

Recruitment and Employment Confederation chief executive Kevin Green says: “The South was the only part of the country to avoid a UK-wide drop in the number of people placed into permanent work last month. But placements of temporary staff continued to fall even here. A general decrease in hiring activity means we could see a period of increased unemployment, especially as a new wave of school leavers and graduates will be entering the labour market over the summer.

“The UK labour market has been remarkably resilient throughout the downturn and our slow economic recovery. However, employer confidence is fragile and it’s not that surprising that under the weight of the eurozone crisis and other bad news placements fell in June.

“I expect as we continue to make slow progress out of recession that we’ll see this kind of a zig-zag pattern with some good months followed by weaker ones – rather than sustained periods of uninterrupted jobs growth.

“There is still demand for workers and permanent vacancies continue to rise. Recruiters tell us that employers are still hiring, but their increased sense of caution is manifesting in them taking longer to
make decisions and to confirm hires – and that slow down in the recruitment process is clearly having a
negative impact on the number of placements.

“But it’s also important to note that the picture is not uniform across all industries. If you are a skilled
engineer or IT professional or in sales or customer services there is still demand for you from employers.”

Phil Cotton, regional chairman for KPMG in the South said: “Today’s statistics show that businesses in the South are clearly thinking about the resource they need for the future and are taking steps to recruit new,
permanent, staff. It is encouraging that they are planning for growth instead of adopting a “wait and
see” attitude, which has been prevalent whilst confidence continues to waver.

“However, we must be aware that the South is bucking a nationwide trend which this month saw other UK regions report a sharp decline in permanent and temporary appointments. This is a sobering reminder that we’re far away from a confident economic situation. Concerns around the Eurozone are taking their toll on business confidence, which in turn has had a knock-on effect on job creation across the country.”

 

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