10 Jun, 2013

Permanent placements rise at fastest rate in six months

Key points:
– Permanent and temporary staff appointments both increase
– Solid, albeit slightly slower, expansion of job vacancies
– Modest rise in pay rates
– Marginal fall in permanent staff availability, temp availability up

The Recruitment and Employment Confederation (REC) and KPMG Report on Jobs – published today – provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies.

Permanent placements and temp billings both rise
The number of people placed in permanent jobs continued to increase in May, with the rate of expansion quickening to a six-month high. Temp billings also rose following a drop in April.

Further expansion of job vacancies
Demand for staff rose further in May. Although easing to a nine-month low, the rate of growth remained solid. Private sector vacancies continued to show a stronger trend than public sector roles.

Modest pay growth
Permanent staff salaries continued to rise in May, although the latest increase was only modest and the weakest in seven months. Temporary/contract staff hourly pay rates also rose, with the rate of growth quickening slightly since April.

Slight fall in permanent staff availability
The availability of candidates to fill permanent job vacancies declined in May, albeit only marginally. Temporary/contract staff availability meanwhile rose slightly.

Regional and sector variation
The Midlands, the North and the South all registered solid growth of permanent placements during the latest survey period, whereas London saw a moderate decline.

Temporary/contract staff billings were higher in each of the four monitored English regions during May. The strongest expansion was signalled in the North, while the slowest rise was indicated by Midlands-based consultancies.

Public sector permanent vacancies fell for a fifth consecutive month in May, albeit at a slower rate. Meanwhile, public sector temporary vacancies increased slightly following a decline in April.

Private sector permanent vacancies rose strongly, with the rate of growth accelerating to the fastest since comparable data were available in December 2011. Similarly, private sector temporary vacancies increased at the sharpest pace for six months.

Engineering remained the most sought-after permanent staff category during May. All other types registered higher demand except Construction, where stagnation was recorded. That said, growth was marginal in the case of Secretarial/Clerical, Blue Collar and Hotel & Catering.

Increased demand was signalled for eight out of nine types of temporary/contract staff in the latest survey period. The strongest growth was registered for Nursing/Medical/Care workers, followed by Engineering. Construction was the only sector where a reduction in demand was recorded, although this was only fractional.

REC chief executive Kevin Green says:
“This month’s data is a strong indicator that the jobs market, the unsung hero of the UK economy over the last 18 months, is picking up pace. Permanent employment is at a six month high while the use of temps is also growing after last month’s blip.

“Recruiters tell us that employers are more optimistic and are planning to increase their temporary and permanent hiring. This is supported by the expansion of job vacancies and a slight increase in starting salaries.

“The only cloud on the horizon is that the skills mismatch is becoming more pronounced. Employers are struggling to find the skilled candidates they need in sales, marketing and business development to prepare for the upturn in the UK economy, while the majority of the unemployed do not have the skills for the jobs that are available.”

Bernard Brown, Partner and Head of Business Services at KPMG, comments:
“It looks as if months of rhetoric are finally becoming a reality.  With permanent placements hitting a six-month high it seems that private sector jobs are boosting the chances of economic growth.

“The latest figures certainly give the strongest indication for some time that the jobs market is on an upward trajectory.  However the pay off seems to be a slow-down in salary growth as new starters’ pay has slowed to its lowest level since the turn of the year.  In other words, as employers look to stabilise and prepare for a more positive economic environment, their message to employees remains one of caution.  Right now it’s a position most will accept as, with uncertainty still the watch-word, the preference for permanent positions will undoubtedly outweigh moves for more money.

“Given the desire for job security, it is also no surprise that fewer candidates are making themselves available to recruiters. Until that changes we are likely to see demand for skilled staff remain high.  It’s a real catch-22 situation, but one for which a solution will be at hand if the economy continues to show signs of improvement.”
Credit: rec.uk.com

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