Technical Moves Blog

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

Key points:

• Marginal drop in permanent appointments but temp billings continue to rise
• Further increase in job vacancies reported
• Stagnation of permanent staff salaries
• Availability of staff improves at sharper pace

Permanent placements fall slightly…

Recruitment consultants indicated a reduction in permanent staff placements for the first time in over two years during October, albeit marginal. Anecdotal evidence suggested the drop in placements reflected hesitancy among clients regarding the economic outlook.

…but temp billings continue to rise

In contrast to the trend seen for permanent placements, a further modest increase in temporary/contract staff billings was recorded during October. The pace of growth quickened since the previous month, although it remained subdued compared with the long-run average for the series.

Permanent salaries stagnate

Starting salaries awarded to successful permanent candidates remained broadly unchanged in October. Panel members indicated that higher levels of staff availability had suppressed pay pressures. Meanwhile, an increase in the national minimum wage was reported to have contributed to solid growth of temporary/contract staff pay.

Stronger improvement in candidate availability

The availability of staff to fill job vacancies was reported to have risen further in October. Permanent candidate availability increased at the sharpest rate since December 2009, while the latest improvement in temporary/contract staff availability was the strongest in 23 months.

Comments:

Kevin Green, Chief Executive of the Recruitment & Employment Confederation, says:
“The November report shows that the UK’s permanent jobs market has stalled for the first time since July 2009. The slowdown is due to a reduction in public sector employment and weakening consumer and business confidence. Therefore, the Government must do more to help especially in encouraging small private sector employers to take on young people. We have been calling for this over the past two years but as the situation is now becoming critical, the Chancellor must address this in his Autumn Statement later this month.

“However, there is some good news as a result of increased hiring activity in sectors such a technology, engineering and professional services such as accountancy and HR that appear to be bucking the trend. It is also worth noting that employers’ use of temps increased last month – fantastic news following the implementation of the Agency Workers Regulations on October 1. This again demonstrates the importance of the UK’s flexible workforce in helping businesses meet fluctuating demand and keeping people in work.”

Bernard Brown, Partner and Head of Business Services at KPMG comments:
“This month’s data presents a gloomy picture for permanent jobs. The figures show permanent placements falling for the first time in over two years. Nervous employers are placing recruitment decisions on hold amidst concerns over the economic outlook, in many cases choosing instead to plug gaps with temps.

“For temporary jobs, the situation is slightly more positive: temporary placements grew at a sharper (albeit still modest) rate in October; and hourly pay rates also increased, for the ninth successive month, partly as a result of a recent uplift in the national minimum wage.
“Whilst permanent employment opportunities have dipped into negative territory, overall the detail reveals this is heavily influenced by fewer employment opportunities in healthcare. There is some positive news with more permanent opportunities in IT, Finance and Accounting showing signs of improvement. However, we are still on a knife edge as we enter a critical time for European economic stability.”

Carl Wright, Director – Technical Moves comments:

“While we do not dispute the findings of this months report, our own personal experience of the employment sector within East Anglia is one which seems to be more robust. September was a very difficult period but we have since experienced an increase in permanent opportunities being registered from early October, with a number of new positions being requested again in core markets including civil engineering, commercial and construction. The built environment sector in East Anglia remains very mixed but we are starting to see some signs of life with clients beginning to test the water. This has been backed up by an increase in clients requesting proposals for staffing New Year projects. While uncertainty still remains in the local market, with clients monitoring future work load and keeping a very close eye on events in Europe, we are cautiously optimistic for the rest of 2011.”

“We would agree with the survey that the subdued nature of permanent salaries is unlikely to change quickly. Clients that have permanent requirements 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 client search and selection.”

For more information or for a copy of the full report please contact us