Demand for permanent staff unlikely to rise until September

Demand for permanent employees is unlikely to rise again until at least September, the head of the Recruitment and Employment Confederation (REC) has told Personnel Today.

Speaking ahead of statistics which will today reveal that the decline in the number of job vacancies has slowed over the last five months, Kevin Green warned it would likely take another four months until demand for permanent and temporary placements rose again.

A monthly report by the REC and professional services firm KPMG, published today, will show that permanent and temporary job vacancies fell in April at the slowest rate since December. Permanent placements last month rose to 37.5 – on a scale where 50 means no change – from 33.5 in March, while temporary staff had improved from 35 to 38.9 over the same period.

However, Green said although employers could draw some hope from the statistics, the recession would take its toll for many months.

“There is some reason for optimism as we’re beginning to shallow out now, However, it will still probably be another four months until we see the figures going in the other direction,” he said.

He added: “The temporary staff market is doing slightly better than the permanent staff market at the moment, and we see it as the lead indicator. When demand comes back for temporary staff, that should be a good sign of the upturn.”

Mike Stevens, head of business services at accountancy KPMG, said that while there was a modest improvement in all aspects of the employment market, it was still deteriorating.

At its peak in 1997, the KPMG/REC index for permanent vacancies was more than 70.

Average starting salaries and hourly wages for permanent and temporary staff also declined by the smallest amount since January. Figures out last week from the Office for National Statistics found pay had plummeted by 6% over the past year.

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