Decline in vacancies still happening but not as fast

The rate of decline in the UK labour market is slowing, as both temporary billings and permanent placements fell at the slowest speed for months.

The rate of decline in the UK labour market is slowing, as both temporary billings and permanent placements fell at the slowest speed for months.

The number of permanent placements being made fell at the slowest rate for six months at 38.4 index points [with 50 equalling no change], compared to 27.9 in February and 36.7 in January, according to the Recruitment and Employment Confederation (REC) and KPMG’s Report on Jobs.

Temporary and contract staff billings also fell at the lowest rate in some time, with March’s 40.6 reading pointing towards the bottom of the demand curve, after registering 33.4 in February and 24.8 in January.

Change in the numbers of vacancies recruiters are working on has varied widely from sector to sector. Overall, vacancy numbers have dropped for the last 10 months, but March had a rating of 30 points, the smallest decline in four months and up from February’s record low of 27.6.

Suzanne Kelly, senior consultant at public relations recruiter VMA Group, told Recruiter: “We are seeing interim, change management and internal communications holding up very well. There’s a lot of companies modifying their internal procedures in the marketplace and people need to communicate well.”

The most beleaguered sector in terms of temporary staff was engineering and construction, which hit 29.3 index points.

Kate Shorthouse, senior consultant hospitality and catering recruiter RBH Recruitment, told Recruiter that permanent vacancies are being filled rapidly because the numbers of jobseekers has increased.

“The market quietened down in March in terms of confidence, therefore there are less vacancies. When they come in we fill them quickly because we have built up a strong quality candidate base on the back of redundancies of late.”

Demand for permanent staff in the hotel and catering sector registered at 28.3 index points, compared to 56.7 at the same time last year.

The nursing, medical and care sector continued to record a growth in demand for temporary staff, at 52.4 points.

Other sectors to be similarly affected are accounting and financial at 30.7, which was the fastest growing sector this time last year, and IT & computing at 31.9.

Falling demand for temporary and permanent staff has caused salary pressure, driving down day rates and placement fees calculated on annual salaries. According to the study, consultants indicated that the high number of candidates had meant that employers were filling positions on lower starting salaries, with permanent pay declining for the sixth consecutive month.

Shorthouse said any drop in salaries has been caused by candidates’ willingness to take on lower-paid jobs.

“There is a slight slide on salaries. Candidates keen to get moving on a new position are a little more flexible on salaries and obviously some clients aren’t in a position to offer [salaries] quite as high as before,” she said. However, Kelly, who recruits in the communications and public
relations sectors for the healthcare industry, said salaries are “holding quite well”.

“People aren’t moving around as much as they would have done previously, so the candidate pool hasn’t increase significantly,” she
added.

The Office of National Statistics mirrored the decline in salaries. Average weekly earnings (including bonuses) in January fell by 2.2% compared to last year, at £446.50.

Mike Stevens, partner and head of business services at KPMG, warned that regardless of the deterioration of the jobs market slowing, “these latest figures leave no doubt that the UK jobs market is at its worst in the 11-year history of the survey and recovery might take longer and be more protracted than many hope”.




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