Labour market shrinks for first time in 2002

Demand
for staff has fallen for the first time in seven months, according to the
Recruitment & Employment Confederation and Deloitte & Touche’s Report
on Jobs.

The
labour market trends report, issued monthly, shows that in August:


Permanent placements rose at slower rate


Temporary staff billings increased for the eighth successive month as companies
prefer flexible workforces in the face of uncertain economic conditions


Demand for staff declined for the first time in seven months. The fall was
driven by the sharpest decline in demand for permanent staff since last December.
The rate of growth of demand for temporary staff also eased to its lowest level
for six months


Demand for staff varied by sector, although the slowdown in demand was
particularly prevalent for staff at the upper end of the labour market


Weaker demand, combined with more available staff resulted in further muted
growth of permanent salaries


Temporary staff pay rates were also affected, with the rate of growth of
temporary staff pay rates the slowest since May

Commenting
on the report, Brett Walsh, head of UK human capital at Deloitte & Touche,
said: "Businesses are clearly concerned that the recent economic recovery
may be faltering and have adjusted recruitment activity to reflect this.

"Of
particular concern is the turnaround in demand for staff which, having showed
renewed growth

earlier
in the year, fell for the first time in seven months in August. Nevertheless,
the increased pool of labour available continues to exert downward pressure on
the growth of wages and salaries, and this will enable businesses to
concentrate on further improving productivity levels over the coming
months."

Tim
Nicholson, Chief Executive at REC said: "Since March this year, the Report
on Jobs has indicated signs of a recovery, albeit a fragile one. These latest figures
underline the need for the Government’s tax and legislative programmes to
actively assist businesses to maintain the recovery. Now is not the time to be
increasing financial and regulatory burdens onto businesses large or
small."

By Quentin Reade

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