07Jul

Demand for permanent staff falls for first time in 5 years


The Report on Jobs is a monthly publication produced by Markit Economics and sponsored by the Recruitment and Employment Confederation and KPMG LLP.

The report features original survey data which provide the most up-to-date monthly picture of recruitment, employment, staff availability and employee earnings trends available.

Key points from June survey:

  • Permanent placements declined for the fourth time in the past five months, and at the sharpest rate since May 2003. Growth of temp billings eased to a five-month low.
  • Demand for permanent staff fell for the first time in five years, while demand for temp staff rose at a slower pace.
  • Nursing/Medical/Care was the most in-demand category for both permanent and temporary staff.
  • Candidate availability continued to improve in a further sign of labour market slack.
  • Pay inflation accelerated but remained subdued by the survey’s historical standards.

Commenting on the latest survey results, Alan Nolan, Director at KPMG said:

“This really is a sobering set of figures proving the credit crunch has finally taken its toll and is now severely weakening the UK jobs market. Many employers now seem to be accepting the inevitable – they will have to cut costs by laying off people because their businesses won’t be growing as much as they could have expected a couple of months ago. We already have seen widespread redundancy programmes in the City and among housebuilders and there are more to come. Even the usually robust temporary jobs market is coming under pressure, adding to the likelihood of a stagnant jobs market and rising unemployment for the foreseeable future.”

The Report on Jobs is unique in providing the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies and employers, as well as data on national newspaper recruitment advertising, to provide the first indication each month of labour market trends.
The main findings for June are:

Further fall in permanent placements…
The latest survey of recruitment consultancies signalled that the job market continued to weaken in June. Permanent staff placements declined for the fourth time in the past five months, and at the sharpest rate in over five years. Temporary/contract staff billings continued to rise, but the pace of growth eased to the slowest in five months.

…as demand for staff faltered
Underlying the drop in placements was a fall in permanent job vacancies for the first in five years during June. Meanwhile, growth of demand for temporary/contract staff eased to the weakest since May 2003.

Availability of candidates continued to rise
In a sign of further labour market loosening, the supply of available candidates continued to improve in June. For both permanent and temporary staff, the latest rises in availability were the strongest since July 2003.

Pay inflation quickened slightly
Despite weakening demand for staff and rising candidate supply, recruitment consultancies reported stronger rises in both permanent and temporary staff pay during June. In both cases, inflation accelerated to three-month highs, but remained well below the respective trend levels.

The Report on Jobs is a monthly publication produced by Markit Economics and sponsored by the Recruitment and Employment Confederation and KPMG LLP.
The report features original survey data which provide the most up-to-date monthly picture of recruitment, employment, staff availability and employee earnings trends available.

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