Permanent Placements Rise at Strongest Rate Since March 2010

Key points

- Faster rise in permanent placements but growth of temp billings eases
- Salaries for permanent staff increase at sharpest rate since October 2007
- Candidate availability declines at stronger pace

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

Permanent appointments rise at strongest rate in almost four years
Recruitment consultants signalled the fastest growth of permanent staff appointments in almost four years during February. However, temporary staff billings increased at the slowest pace in three months.    

Demand for staff continues to grow strongly
February data indicated a further marked rise in vacancies. The rate of expansion was only marginally below January’s fifteen-and-a-half year high. 

Sharpest rise in permanent salaries since October 2007
Growth of permanent salaries accelerated in February, reaching the highest rate in over six years. Temporary staff pay increased at the fastest pace since last July.

Candidate availability falls at sharper rate
The availability of staff was reported to have declined again in February. In particular, the supply of permanent candidates fell at the sharpest rate since November 2004.

Regional and sector variation
Growth of permanent placements was strongest in the North of England during the latest survey period, while London posted the slowest (but still marked) increase.

Midlands-based agencies signalled the strongest increase in temp billings during February, while growth was slowest in the South.

Private sector demand for permanent staff rose at a steep rate in February, with the latest increase the sharpest since data were first available in December 2011. Private sector demand for temporary staff also grew at a series-record pace.  

Rates of expansion in the public sector were solid but considerably slower than in the private sector. 

Engineering remained at the top of the demand for staff ‘league table’ in February. Construction and Nursing/Medical/Care also registered strong rates of growth. The slowest rise in demand was indicated for Blue Collar workers.

Occupying top position in the temporary/contract staff demand rankings during February was Nursing/Medical/Care. The Blue Collar and Secretarial/Clerical categories completed the top three.

 
Comments:
REC CEO Kevin Green said:
“This month’s figures show the second highest ever results in permanent placements since Report on Jobs began in 1997. The positive trend of rising vacancies continues and this is supported by our JobsOutlook data on employers’ hiring intentions that shows businesses will be taking on more workers in 2014 as their confidence grows. 

“However the number of candidates available to fill vacancies continues to fall and this is becoming a business critical issue in highly skilled roles. Recruiters are struggling to source the managerial and technical skills that employers require and this will only get worse as the economy strengthens.

“Negative rhetoric on immigration from politicians fails to consider the immediate needs of British businesses. The government must address the restrictions on visas for highly skilled workers. This would allow businesses to access the people they need to grow and create jobs for more British workers.” 

Bernard Brown, Partner and Head of Business Services at KPMG, comments:
“Working Britain appears to be suffering from a clash of confidence.  With permanent appointments rising at the strongest rate for almost four years, employers appear determined to show they are secure enough to make long-term commitments.  Candidates, on the other hand, are less certain, preferring to stay put than advance their careers in a new environment.

“Yet individuals’ nervousness may be misplaced.  Temporary placements are falling and with starting salaries rising at their highest rate for almost seven years, all the indications are that any concerns over job security may be unwarranted.  The simple fact is that employers wouldn’t be competing to offer candidates ever increasing salaries if they couldn’t afford to sustain them.  Doing so would be a short-term folly and run the risk of undermining recovery.

“Those in the North are recruiting hardest and fastest, and even the slowest area - in London – is seeing a marked increase.  The hope now must be that employees and employers rethink their approach and the clash of confidence is replaced by a meeting of minds.”

ENDS