Staff Placements Fall at Fastest Pace for Almost 3 Years
Permanent placements fell for the first time in six months during June, and at the sharpest rate for just under three years. Temporary/contract staff billings were down for the seventh month running, with the rate of decline accelerating to the fastest since July 2009.
Overall demand for staff showed the weakest increase for five months in June. Growth of permanent vacancies eased further, but temp vacancies rose at a fractionally faster pace.
Bernard Brown, Partner and Head of Business Services at KPMG, comments: “After five months of consecutive growth, the latest recruitment data comes as a sobering reminder that we’re far away from a confident economic situation. Indeed, with both permanent and temporary appointments declining at the sharpest rate in nearly three years and overall demand for staff showing the weakest growth since the start of 2012, the outlook would appear bleak.
“Of course, we must remember that these figures have come on the back of months of uncertainty in the Eurozone, the Greek elections and a worsening debt position in Southern Europe. This has dented confidence and created nervousness around investment, which in turn has impacted job creation. That said, there are some bright spots to be seen – most notably in the South which bucked the trend with a solid growth in permanent placements.
“However, a real worry for me is the acceleration in the pace of decline, which suggests this isn’t a mere blip. If this trend were to continue, there’s a very real chance we could hit a 3 million unemployed figure in the UK in the not too distant future.”
Recruitment consultancies indicated higher levels of both permanent and temporary staff availability during June, with the latter recording the stronger growth.
Average salaries for people placed in permanent jobs were broadly unchanged in June, while temporary/contract staff hourly pay rates were also stable.
London, the Midlands and the North all registered lower placement volumes during the latest survey period, with only the South bucking the trend by posting growth. Lower temp billings were recorded in all monitored English regions with the exception of the Midlands, which posted solid growth.
IT & Computing and Engineering/Construction were the most in-demand types of permanent employee during June. For temps, Nursing/Medical/Care staff saw the strongest demand growth.
Recruitment and Employment Confederation chief executive Kevin Green says: “The sharp drop in the number of people placed into work last month is really disappointing. A 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 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, IT professional or in nursing or secretarial work there is still increasing demand for you from employers.”