Technical Moves Blog

Jobs Market Review – August 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 August 2011 is summarised as follows:

Summary

• Further moderate increases in permanent placements and temporary billings
• Growth of vacancies continues to ease
• Weakest rise in permanent salaries for 22 months
• Strongest rise in permanent candidate availability since January 2010

Staff appointments continued to increase at moderate pace…

Permanent staff placements rose in August at a modest pace that was identical to that recorded in the previous month. Similarly, growth of temporary staff billings held broadly steady since July.

…but growth of vacancies eased further

Although demand for staff continued to rise in August, the latest increase in overall vacancies was the slowest in nine months. Weaker rates of expansion were signalled for both permanent and temporary vacancies.

Subdued pay pressures…

Permanent staff salaries increased only marginally and at the slowest pace for 22 months in August. Inflation of temporary staff hourly pay rates quickened to a three-month high, but remained weak compared with the survey’s historical trend.

…amid higher levels of candidate availability

Recruiters indicated another rise in the availability of staff during August. Permanent candidate supply improved at the fastest pace since January 2010

Comments:

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

“The latest Report on Jobs from the REC and KPMG highlights the robustness of the UK jobs market. In the face of a slowing economy, falling consumer confidence and high inflation, private sector employers continue to hire staff. The numbers are lower than three months ago but placements continued to rise in August, which was the twenty-fifth consecutive month of growth. The figures also show that with a month to go before the introduction of new regulations covering agency workers that businesses continue to depend on and use this flexible resource.

“The UK jobs market is being incredibly resilient. Even with increasing job losses in the public sector and a new influx of school-leavers it is performing much better than many predicted. We are confident that this trend is set to continue and that the Agency Workers Regulations will not undermine the UK’s flexible labour market given that our members and their clients seem well prepared for the impact of the AWR next month.”

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

“Although the jobs market has held up relatively well, it remains in the summer doldrums and, worryingly, there seem to be early signs of trends similar to those of 2008.  Whether this is a blip or a return to a familiar and unwelcome pattern will emerge over the next few months.

“Employers continue to take a cautious approach to hiring decisions amid an uncertain economic climate. Whether this will persist as the summer holidays draw to a close is an open question.  Much will depend on macro-economic factors and their effect on overall confidence, especially where permanent hiring decisions are concerned.  With candidate availability continuing to grow – notably permanent staff availability has improved at the fastest pace since January 2010 – it’s a buyers’ market should employers choose to step up their recruitment in the autumn.”

Carl Wright, Director – Technical Moves comments:

“August is always a difficult month to assess for employment trends due to the holiday season and the lack of availability of key decision makers. However, private sector clients seem to be holding up well within East Anglia. The response is still mixed with housing clients and associated industries still finding things difficult. However, other sectors including some engineering, sales and specialist areas are experiencing growth and are recruiting. Our experience in this region would also reflect the surveys findings on the subdued nature of permanent salaries which is unlikely to change quickly with the shortage of opportunities.

Clients still remain 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 rsk out of a client search and selection.”