Decline in Recruitment Continues to Slow

The arrival of any recovery in the job market may still be a long way off, but at least the rate at which it is declining is slowing down. The REC’s and KPMG’s Report on Jobs shows the UK job market deteriorated at a slower pace in May than it had done in previous recent months.

The Report highlights that although the number of vacancies continued to fall in May, the pace of decline eased once again from February’s record to the slowest in 7 months. There were weaker reductions in demand for both permanent and temporary staff.

The Report shows that during May the number of permanent and temporary staff appointments fell once again – as did the value of the billings made by recruitment agencies from employers for providing them with staff.

With the supply of candidates continuing to outstrip available jobs in May, pay rates also remained under pressure – the starting salaries for people placed in permanent jobs decreased at a sharp pace (albeit a four-month low), while average hourly pay for temps also fell.

But the Report’s publishers saw some cautious reason for hope. Mike Stevens, Partner and Head of Business Services at KPMG commented: “There is now some reason to hope that the UK jobs market has overcome the worst, at least for this phase of the recession. For the third successive month we have seen a slowing in the rate of decline in both temporary and permanent staff appointments. Demand for staff is still falling but much less fast than at the beginning of the year and many employers seem to be holding off shedding staff and contemplating recruitment.

“However, it remains difficult to build real optimism of an incipient recovery because most of the world remains mired in the depths of recession. In addition, the uncertainties of public sector spending associated with the final year of a Government that is losing the capacity to borrow make it all the more difficult for businesses to contemplate the investment – in people, ideas and capital spend – that would begin to show evidence of a sustainable recovery.” 

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