Figures released today point to a modest reduction in permanent placements as well as the first reduction in temporary placements for two and a half years.
The figures are included in the latest Report on Jobs, published by the Recruitment and Employment Confederation (REC) and KPMG, which is based on data provided by recruitment consultancies.
As well as the decline in permanent appointments and the first drop in temporary billings since July 2009, the report also highlights the sharpest surge in candidate availability since October 2009.
The report also found that permanent salaries had remained broadly unchanged, while temp pay was down slightly for the first time since January 2011.
Kevin Green, chief executive of the REC, suggested that the jobs market was more positive than the figures suggested: “While the jobs market is tough it remains resilient and is functioning well. There are clearly signs of decline but we are nowhere near the lows seen in 2009 when the market deteriorated at a drastically faster rate than we are seeing today. Employers are still hiring and using temps in large numbers; however, they are starting the year on a cautious note and are taking their time to make workforce decisions. The quicker the eurozone sovereign debt crisis is resolved and we get some economic visibility, the better it will be for employer confidence and the UK jobs market.
“The sector analysis shows that some sectors remain strong, namely engineering, technology, IT and office professionals, and we’ve also seen a surprising increase in demand for nursing, medical and care staff despite ongoing austerity measures. However, the finance and accountancy market has been in negative territory for two consecutive months and the hotel and catering sector has seen a significant downturn over the past two months. This might be a short-term blip as we build up to a peak of demand around the Olympics but it could also be a worrying indicator of a lack of engagement in the Olympics from both business and consumers.
“Overall, the cautiousness in hiring seems to be driven by a lack of confidence in the wider economic situation than a significant downturn in demand. For example, in the last month’s survey of employers, a total of 71% said they still intend to increase their permanent workforces in the coming year and this month’s Report on Jobs shows that vacancies remain strong.”