Candidate placements continued to rise at a solid rate in April

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 Deloitte/REC Report on Jobs showed that recruitment consultanciesí permanent staff placements and temporary staff billings continued to rise at robust rates in April. Higher placements were supported by a further strong improvement in demand for staff at employers, though the rate of demand growth eased slightly to a sixteen-month low. Improvements in demand were recorded for seven of the eight main types of permanent employee, and for all categories of temp staff. Meanwhile, the availability of candidates to fill vacant positions at companies continued to deteriorate sharply, but the rate of decline eased to the slowest in fourteen months. Pay inflation remained sharp, with permanent staff salaries rising at the highest rate in seven months. Average temp staff pay rates were also up, but at the least marked rate in fourteen months.

Commenting on the latest report, Ashley Unwin, a partner in the consulting business at Deloitte said:

The continued demand for permanent staff in April contributed to sharp pay inflation. Organisations need to consider the impact of high starting salaries on the expectations and longer term commitment of existing staff.

Also commenting on the latest report, Marcia Roberts, deputy chief executive at the REC reported that:

In the past two years the UK job market has performed strongly and the demand for staff is continuing to rise. However, we are starting to see the early signs that this demand is beginning to plateaux, in particular across the temporary sector. We are entering a crucial period for the UK labour market and the new Labour government should think very carefully before implementing any new legislation that may restrict employment creation and push the labour market into reverse. UK business needs the Government to fight its corner in Brussels, particularly on key European employment legislation such as the Agency Workers Directive and the Working Time Directive.

In April we also witnessed the sharpest drop in manufacturing sector staffing levels for two years. The recent redundancies in the sector and the knock on effect it has had on suppliers highlight the sensitivities of the UK jobs market concluded Roberts.

Solid growth of recruitment activity
Aprilís Report on Jobs survey pointed to a further healthy expansion in recruitment activity. Both permanent staff placements and temporary staff billings were up for the twenty-third consecutive month, posting solid rises on the previous month. However, a divergence in growth trends was observed, suggesting a slight shift in employersí preference to hire permanent ahead of temp staff. Permanent staff placements growth quickened for the second month running, to the strongest in four months. Meanwhile, the rate of increase of temp staff billings eased for the sixth month running, to the weakest in twenty-one months.

Growth of actual employment held steady
Actual private sector staffing levels continued to rise at a moderate pace in April, according to the CIPS/NTC Research Employment Index. Service sector employment growth quickened from the previous month, while growth of construction sector staffing levels remained robust. Manufacturing sector employment, however, was down in April following Marchís gain.

Demand for staff up strongly again
The Report on Jobs Vacancies Index continued to signal a strong rate of improvement in demand for staff in April, despite falling slightly to its lowest level in sixteen months. Growth of demand for permanent staff remained sharper than for temp staff. Seven categories of permanent staff recorded improvements in demand, led by Hotel & Catering staff.

National press recruitment advertising in the UK was down 8.3% on the same period a year earlier in March. The Press Recruitment Advertising Index pointed to the sharpest annual rate of decline in over two years.

Candidate availability declined at a slower rate
The overall availability of candidates to fill positions at employers was down sharply again in April, with consultancies reporting that a number of key skill-sets were still in short supply. However, the rate of deterioration in candidate availability eased to the slowest in fourteen months. Permanent staff availability again fell at a more marked rate than temp availability.

Sharp inflation of average pay rates
Strong demand for staff and shortages of suitable candidates contributed to a further round of strong pay inflation in April. Salaries awarded to successful permanent candidates rose at the sharpest rate in seven months, as companies raised incentives to attract the best staff. Although temp staff pay rates also posted a solid rise from March, the rate of increase slowed to the least marked in fourteen months, mirroring the easing trend in demand growth.