Permanent placements rise at fastest rate for 17 months

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Key points:

  • Permanent appointments increase for first time since May
  • Growth of temp billings accelerates to 18-month high
  • Sharpest rise in job vacancies since June 2011
  • Nursing/Medical/Care staff remain most in-demand
  • Further weak pay growth recorded

Summary:

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

Permanent placements rise at marked rate
Appointments of permanent staff increased for the first time since May, and at the fastest rate in 17 months. Higher placements were supported by a stronger expansion of job vacancies (the most marked since June 2011).

Temp billings growth at 18-month high
Short-term staff billings increased for the third month running in October. Moreover, the rate of growth accelerated to the sharpest for one-and-a-half years.

Pay growth remains muted
Permanent staff salaries rose for a sixth successive month in October, albeit only slightly. Hourly rates of pay for temporary/contract staff increased marginally for the second month running.

Slight rise in candidate availability
The availability of permanent staff continued to rise in October, although the rate of growth eased to a five-month low and was modest overall. Temp availability increased at the weakest rate in the current 55-month period of growth.

Regional and sector variation
Growth of permanent placements was broad-based across all English regions in October, with the sharpest expansion recorded in the North. The South and Midlands both saw faster increases in placements, while London registered a return to growth following eight months of contraction.

Temporary/contract staff billings rose fastest in the Midlands, while marked increases were signalled in the North and South. London posted a modest rise following a decline one month previously.

Private sector workers saw a further rise in demand for their services during October although, for both permanent and temporary staff, rates of expansion were slower than one month previously.

Public sector demand for permanent staff continued to fall in October, albeit at a slower pace, while public sector temporary vacancies rose slightly for the first time in the 11-month series history.

Demand increased for seven of the eight categories of permanent staff monitored by the survey in October. The most sought-after type was Nursing/Medical/Care, closely followed by Engineering/Construction. The only category to register a decline in demand was Hotel & Catering.

Mirroring the situation for permanent staff, Nursing/Medical/Care workers were the most in-demand temp category during October, followed by Engineering/Construction. Demand rose elsewhere with the exception of Executive/Professional, which saw a marginal reduction.

Comments:
Recruitment and Employment Confederation chief executive Kevin Green says:
“This is exciting news from the labour market. The positive performance we’ve seen from the UK jobs market over the past year is accelerating, with increases in the number of people placed into both temporary and permanent work last month.
“The sharpest rise in job vacancies in over a year shows employers are confident about their own businesses and, as they deal with increasing demand, are driving the momentum for more people finding work.

“We’ve now seen rises in the number of workers placed into temporary jobs for three months in a row. This is a sure sign British bosses understand the business case for using a flexible workforce to handle fluctuating demand and costs effectively. More people engaging in flexible work is a trend that’s going to increase in our post-recession economy.”

Bernard Brown, Partner and Head of Business Services at KPMG, comments:
“Employment figures received a boost across the US and it seems that the UK is following America’s lead. The latest figures show increasing numbers of people are finding work across the UK in both temporary and permanent positions. That alone is good news, but in the context of jobs being filled at the fastest rate for nearly 18 months, we seem to be stepping in the right direction – something that was barely thought possible just a few short months ago. It may not be leaps and bounds yet, in terms of progress, but these are the largest strides for some time and should not go un-noticed.

“There were also concerns that the Olympic employment effect was a temporary blip on a gloomy horizon, but with London and other regions across the country now seeing a broad growth of permanent placements, indications are that employers are gaining in confidence and laying the foundation stones for economic growth. Of course, no one should be under any illusions that a strong jobs market indicates a strong recovery, but confidence is what drives a buoyant market and the hope must be that businesses are ready to recruit for the long-term.

“It should, however, come as little surprise that demand for staff is low in the public sector. At least this is being partially off-set with the data showing that private sector workers are seeing a further rise in demand for their services. Perhaps as we edge towards the end of 2012, businesses really can start to look forward to a better new year.”

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