Permanent Placements Fall for First Time Since September 2012

Key points:

• Brexit concerns hit recruitment activity in June
• Pay growth slows further
• Candidate availability continues to deteriorate

Summary:

The Markit/REC Report on Jobs – published today – provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies.  

 

Drop in permanent placements...

The number of people placed in permanent positions fell in June. Although slight, it was the first decline in 45 months. Anecdotal evidence suggested that uncertainty in the lead-up to the EU referendum (data were collected between 13-24 June) had heavily impacted on activity. 

         

...while temp billings rise at slower rate

Although temporary/contract staff billings continued to increase in June, the rate of growth eased to a nine-month low. Brexit uncertainties were frequently cited by survey respondents.

 

Pay growth continues to ease

June data pointed to a further easing of permanent salary growth. The latest increase was the least marked since September 2013. Temp pay also rose at a slower pace, hitting a three-month low.  

 

Further drop in candidate availability

The availability of staff continued to fall in June. Permanent candidate supply decreased at a marked pace that was sharper than in May, whereas temp availability fell at the slowest rate in 33 months.

 

Regional and sector variation

London saw a further drop in permanent placements, with the rate of decline the sharpest since December 2012. Scotland saw broadly unchanged placements, while the Midlands and South registered weakening rates of growth. The North posted the strongest increase overall.

 

Agencies in the South of England reported stagnant temp billings during June, while slower increases were recorded in the Midlands, North, London and Scotland. 

 

Higher demand was signalled for both public and private sector vacancies. The stronger growth was indicated for the latter, with private sector temporary workers seeing the fastest increase overall.

 

Engineering staff topped the ‘league table’ in June, recording the strongest growth in permanent vacancies of the nine monitored categories. In second place was Nursing/Medical/ Care. Hotel & Catering staff on the other hand saw only a modest rise in demand.     

 

Nursing/Medical/Care workers saw comfortably the sharpest rise in temporary vacancies during June, with Hotel & Catering staff in second place. The weakest growth was signalled for Executive/ Professional staff.

Comments:

 

REC chief executive Kevin Green says:

 

“Uncertainty during the run-up to the referendum saw many employers suspend permanent hiring and instead bring in temporary, contractor or interim staff to hedge against potential changes to their growth prospects.

 

“Whilst it is too early to assess what the impact of the vote to leave the EU will be on jobs, our data underlines the need for uncertainty to be minimised so that our economy and our labour market are not adversely affected. The best thing for business right now is clear and calm leadership and as much clarity as possible on what the post-EU future will look like. 

 

“We are consulting our members and so far it is clear that for recruiters the best way to ensure the continued health of our labour market, and the economy that relies on it, is by maintaining membership of the single market and access to skills across the EU.

 

“Before the referendum, businesses were already finding it increasingly hard to source the right candidates. Ensuring employers can still access the people they need to succeed must now be top of the list in any negotiations.”

 

ENDS