10.07.09

Bad News, Better News on UK Job Market

This month’s report on Jobs from the Recruitment and Employment Confederation and KPMG is something of a bad news, better news story. 

The bad news is that the job market, at least from the recruitment industry’s point of view, continued to decline last month.  The better news is that the decline continued at the slowest pace since the start of the year. 

The survey, covering 400 recruitment agencies, found that in June the fall in job appointments for permanent staff was the lowest for 13 months. 

In terms of the number of job vacancies placed with them, the fall in permanent vacancies was the weakest for nine months and for temporary placements it was the weakest fall for eight months.

It also found that billings for temporary staff placed by the agencies with employers declined at its slowest rate since last September.

Meanwhile, the number of people looking for both permanent and temporary work increased sharply once again.

Putting the survey’s findings into perspective, Mike Stevens of KPMG, said: “Although the rate of decline for permanent and temporary placements continues to slow, it is probably too early to talk about a recovery in the UK jobs market. One reason why we see continued improvements may be that more UK employers are asking staff to work reduced hours for lower pay in return for less aggressive redundancy plans.

“This approach is definitely one of the hallmarks of the current recession. Many employers understand they need to engage properly with employees to address the difficult economic situation. They are keen to retain access to the knowledge and skills of their staff and employees can feel slightly less insecure. This approach may have played a part in moderating the impact on employment during the current recession.”

Not surprisingly the ongoing decline in the jobs market continues to hit the recruitment industry itself.  Agencies are closing or going out of business altogether, and there have been a spate of mergers and acquistions within the sector.

For instance, Hays, one of the largest agencies in the UK has closed 15 offices, reduced staff numbers by 5 per centand seen net fee income fall by 45 per cent over the past quarter – compared with the same period last year.

Hays, which operates globally, has so far cut its staff numbers by 26 per cent during its present financial year.

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