Further solid rise in recruitment activity in February

The Report on Jobs, published today by the Recruitment & Employment Confederation and Deloitte, provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies and employers, as well as data on national newspaper recruitment advertising.

The latest REC/Deloitte Report on Jobs showed that recruitment consultantsí permanent staff placements and temporary staff billings rose at the slowest rates for nineteen months in February, although in both cases growth remained robust. Demand for staff continued to rise strongly, despite a marginal easing in the rate of improvement to a fourteen-month low. Strong demand for staff, combined with reported skill shortages, was reflected in another round of sharp pay inflation in February. Meanwhile, a further deterioration in candidate availability was recorded, but the rate of decline slowed to the least marked in eleven months.

Commenting on the latest report, Brett Walsh, European Head of Human Capital at Deloitte said:

This monthís Report on Jobs shows recruitment activity growth continued to cool in February. Employers will be relieved to see that recent difficulties with candidate availability are beginning to ease.

Also commenting on the latest report, Gareth Osborne, Managing Director at REC reported that:

Although there is a levelling out in terms of the actual rate of increase, the average weekly billings for temporary and contact staff have now risen for the twenty-first consecutive month. This once again underlines the importance of temporary work within the UK labour market and highlights the importance of avoiding any legislation - in particular the current draft of the EU Agency Workers Directive - which could impact on the effective provision of this vital service. Overall demand for staff remains strong and the recruitment industry continues to play a key role in helping employers to address current skills shortages and resourcing challenges. Government proposals for extending parental rights and flexible working will make the effective provision of flexible resourcing solutions more important than ever.

Permanent staff placements and temporary staff billings rose at slightly weaker rates
The latest Report on Jobs survey showed that recruitment activity growth continued to cool in February. While the number of people placed into both permanent and temporary jobs increased for the twenty-first consecutive month, growth slowed to the weakest in nineteen months. Nevertheless, recruitment consultancies indicated that both permanent staff placements and temporary staff billings were still growing at robust rates, with rising business levels and improved confidence at clients reported to have underpinned the latest expansions.

Stagnation in actual employment
With growth of staff placements slowing, expansion of actual private sector staffing levels softened to a negligible rate in February (as measured by the CIPS/NTC Research Employment Index). Weaker growth of whole economy employment principally reflected a slowdown in growth of service sector workforces, to only a marginal rate. Services firms reported that cost-cutting initiatives had played a part in the slower growth of employment during the month. Manufacturing sector employment fell for the third straight month, with the rate of decline sharpening slightly. Meanwhile, construction sector employment continued to expand at a robust rate, although the latest rise was the least marked in six months.

Growth of demand for staff remained strong
Rising staff appointments reflected continued strong growth of demand for staff in February, as shown by the Report on Jobs Vacancies Index. Although the index fell marginally, to a fourteen-month low, it still signalled a marked improvement in demand for staff. The fastest growth of demand for permanent staff was again seen for Executive/Professional staff, while Secretarial/Clerical staff registered the greatest improvement in demand among temporary staff.

National press recruitment advertising in the UK was up 4.4% on the same period a year earlier in January. The Press Recruitment Advertising Index showed a quickening in the annual rate of growth from the previous month.

Decline in candidate availability eased again
The rate of deterioration in candidate availability slowed to the least marked in eleven months during February, mirroring weaker growth of staff placements. Both permanent and temporary staff availability fell at less sharp rates.

Pay rates continued to rise strongly
Strong demand for staff drove a further round of pay inflation in February, at a similar marked rate to the previous month. Consultancies also highlighted persistent skill shortages amongst available candidates as a factor pushing up pay rates.