Nervous employers look to contractors
Clients' use of temporary or contract workers has increased in October, despite concerns about the impact of the Agency Workers Rights regulations.
The latest REC/KPMG Report on Jobs also shows a reduction in permanent staff placements for the first time in over two years albeit marginally.
But in contrast to the trend seen for permanent placements, a further modest increase in temporary/contract staff billings was recorded during October. The pace of growth quickened since the previous month, although it remained subdued compared with the long-run average for the series.
Kevin Green, Chief Executive of agency group, the REC, said: "The November report shows that the UK's permanent jobs market has stalled for the first time since July 2009. The slowdown is due to a reduction in public sector employment and weakening consumer and business confidence.
"However, there is some good news as a result of increased hiring activity in sectors such as technology, engineering and professional services such as accountancy and HR that appear to be bucking the trend.
"It is also worth noting that employers' use of temps increased last month – fantastic news following the implementation of the Agency Workers Regulations on October 1. This again demonstrates the importance of the UK's flexible workforce in helping businesses meet fluctuating demand and keeping people in work."
Plugging the gaps
Co-authors of the survey, accountants KPMG said that clients could be delaying recruiting employees in favour of contract workers due to the economic uncertainty.
Bernard Brown, Partner and Head of Business Services at KPMG said: "This month's data presents a gloomy picture for permanent jobs. The figures show permanent placements falling for the first time in over two years. Nervous employers are placing recruitment decisions on hold amidst concerns over the economic outlook, in many cases choosing instead to plug gaps with temps.
"For temporary jobs, the situation is slightly more positive: temporary placements grew at a sharper (albeit still modest) rate in October; and hourly pay rates also increased, for the ninth successive month, partly as a result of a recent uplift in the national minimum wage."