Permanent staff placements fell for the first time in fifty-seven months in February

Industries 05 March 2008

February’s Report on Jobs, from the Recruitment and Employment Confederation and KPMG, signalled a drop in permanent staff appointments for the first time since May 2003. The decline in placements reflected a further slowing in growth of demand for staff and continued shortages of skilled candidates. A contrasting trend was signalled for temporary/contract staff billings, which rose at the fastest pace for three months. Meanwhile, inflation of wages and salaries continued to ease.

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

Alan Nolan, Director at KPMG comments:

“The credit crunch and the discussions around recession have taken their toll on the labour market during February with the first fall in permanent staff placements since 2003. Unsurprisingly perhaps, in contrast the number of temporary appointments has grown at the fastest pace in three months, suggesting that employers are dealing with the uncertainty in the economy by moving towards a more flexible labour force. The good news is that although pay is still on the increase, the rate of growth has substantially slowed down. This will be a welcome message for the Monetary Policy Committee who were worried that higher food and energy prices will push up wage demands.”

Helen Reynolds, Acting Chief Executive Officer, Recruitment and Employment Confederation (REC) comments:

“The increase in demand for temporary workers once again highlights the crucial support that agency staff provide for UK employers and the opportunities that this form of flexible work provides for the workers themselves. As a result, it is crucial to ensure that proposed new regulations on agency work – such as those included in the recent Private Members Bill – do not have a negative impact on the UK’s temp model.

“Although the demand for permanent placements was down, it is important to note that there is still extremely strong demand in specific areas such as social care and construction. Within this context, it is essential that the Government’s new points-based immigration system reflects the needs of employers in these sectors. ”

-ENDS-

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Further information:
KPMG: Katrin Boettger, KPMG Corporate Communications on 0207 896 4232 or the KPMG Press Office on 0207 694 8773
REC: Susanna Loughnane at the REC press office on 01753 827 282
NTC (technical/data queries): Chris Williamson on 01392 202 361 or Jack Kennedy on 01491 418687

Notes to editors:
The Report on Jobs is a monthly publication produced by NTC on behalf of the Recruitment & Employment Confederation. The report features original survey data which provide the most up-to-date and comprehensive monthly picture of recruitment, employment and employee earnings trends available.

The Report features original research data from NTC, collected via questionnaire from a panel of 400 UK recruitment and employment consultancies. In 2000, some 1,326,000 people were employed in either temporary or contract work through consultancies and over 450,000 people were placed in permanent positions through consultancies. Data for the monthly survey were first collected in October 1997 and are collected at the end of each month, with respondents asked to specify the direction of change in a number of survey variables.

With the exception of the Press Recruitment Advertising Index, all Index numbers are calculated from the percentages of respondents reporting an improvement, no change or decline. These indices vary between 0 and 100 with reading of exactly 50.0 signalling no change on the previous month. Readings above 50 signal an increase or improvement; readings below 50 signal a decline or deterioration. Reasons given by survey respondents for any changes are analysed to provide insight into the causes of movements in the indices and are also used to adjust for expected seasonal variations.

Recruitment Advertising in National Newspapers data is derived from original survey data collected from media owners by NTC on behalf of the UK Advertising Association together with information from Nielsen Media Research. The data from both NTC and Nielsen Media Research refer only to advertisements in UK national newspapers and therefore tend to reflect trends in the managerial, professional white collar and executive job markets.

Recruitment and Employment Confederation
15 Welbeck Street, London, W1G 9XT. Tel: 020 7009 2100. Fax: 0207 935 4112 Website: www.rec.uk.com The REC is the association for the £24.5 billion private recruitment and staffing industry in the UK, with over 8,000 recruitment agencies and 5,500 recruitment consultants in membership. There are 1.2 million temporary workers registered with UK agencies, and up to 1 million temps are deployed in industry, commerce and the public services every day.

NTC Economics
Farm Road, Henley-on-Thames, Oxon, RG9 1EJ. Tel: 01491 418700. Fax: 01491 571188. NTC Economics is one of the world's largest specialist providers of business research information, operating business surveys on behalf of blue chip clients. Current research includes continuous surveys providing original data on economic conditions in the UK, Germany, France, Italy, Spain, Netherlands, Austria, Ireland, Greece, Russia, Poland, the Czech Republic, Hong Kong, Turkey, Brazil, India, Japan and China. NTC surveys are widely used by governments, businesses and financial markets.