Recruitment market growth slows to ten-month low

The recruitment market grew at the slowest rate for 10 months in August as cuts to the public sector began to bite, the latest Report on Jobs has revealed.

The research, from the Recruitment and Employment Confederation (REC) and professional services firm KPMG, shows that while the number of people placed in new jobs by recruitment consultancies continued to increase in August, growth was the least marked since October 2009.

There was also evidence of weakening pay pressures in August, with permanent staff salaries rising at the slowest rate for seven months and temporary staff pay growth at a five-month low.

Although staff appointments rose at a slower pace, there was evidence of growing skill shortages. The availability of permanent staff declined at the sharpest rate since November 2007, while temporary staff availability rose, but only marginally.

Kevin Green, chief executive of the REC, said: “Growth is rapidly slowing as public sector job freezes start to bite and private sector employers’ confidence remains fragile. The young are being disproportionately affected by the worst labour market in over two decades.”

Green noted that the report does however highlight the emergence of specific shortage areas, such as chefs, nurses, engineers and internet developers, which will provide opportunities for those with the right skills.

“A priority for government is to ramp up the support and guidance for job-seekers and to raise awareness of these growth areas within our labour market,” he added.

Bernard Brown, partner and head of business services at KPMG, said the months ahead will see a substantial reduction in public sector headcount as the cuts begin to bite.

“That is the painful but inevitable consequence of the coalition Government’s determination to tackle the UK’s massive structural deficit,” he added. “The big question is whether the private sector can create new jobs in sufficient numbers and quickly enough to offset the downturn in the public sector.”

Earlier this week, separate research from recruitment firm Manpower predicted that the recruitment market would remain flat for the remainder of 2010.

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