Technical Moves Blog

Job Market Review – September 2011

The Recruitment and Employment Confederation (REC) and KPMG Report on Jobs – published this week – provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies of which Technical Moves have contributed. The most recent report on Jobs data received during September 2011 is summarised as follows:

Summary:

• Slowest increases in permanent placements and temporary billings since August 2009
• Weakest rise in job vacancies for almost two years
• Pay pressures remain muted
• Stronger improvement in candidate availability

Slower growth of placements and billings…

Rates of expansion of both permanent and temporary/contract staff appointments moderated in September. In both cases, the latest increases were the weakest for just over two years, amid reports from panellists of fragile client confidence.

…as demand for staff increased at weaker pace

Although job vacancies continued to rise in September, the rate of growth eased further. Overall demand for staff increased at the slowest pace since October 2009. Weaker expansions of demand were signalled for both permanent and temporary/contract workers.

Pay inflation remained historically subdued…

The rate of inflation of permanent staff salaries quickened in September, but remained well below the average recorded throughout the survey’s 14-year history. Hourly temp pay rates increased modestly on the month.

…dampened by rising staff availability

The availability of permanent candidates improved for an eighth successive month in September, and at the sharpest rate since December 2009. Growth of short-term staff availability picked up to a seven-month high.

Comments:

Kevin Green, Chief Executive of the Recruitment & Employment Confederation, says:

“Employers are being very cautious about hiring at the moment. This has been exacerbated by weak consumer confidence which leads to people staying in their current role rather than changing jobs. The private sector is still producing new jobs but not in the quantity needed to offset the job losses in the public sector. These factors combined have resulted in the slowest increases in both permanent and temporary billings since August 2009. It’s vital that we look at ways to boost these numbers, particularly for young people who continue to be disproportionately affected by unemployment.

Bernard Brown, Partner and Head of Business Services at KPMG, comments:

“This latest data suggests that surely it’s only a matter of time now before we move from a growth position to one of a contracting jobs market. “September saw rates of growth decline to the weakest for just over two years in both permanent and temporary appointments.

“And although there is still some slight growth, continuing a period of 26 consecutive month-on-month increases in appointments, the rate is slowing.

“The employment agencies surveyed reported that the slower expansion of placements was linked to a lack of confidence among clients over the economic outlook. These macroeconomic concerns and the general downward direction of the growth rate, suggests that we could see it cross the line and move into decline in the near future.

Carl Wright, Director – Technical Moves comments:

“September has been a difficult period, with clients still remaining cautious about permanent requirements and they are looking to get a very high match to their job specifications before even considering candidates for interview. This reinforces the need for clients to consider using a specialist recruitment company which can find the right candidate and take the risk out of a clients search and selection.”