Recruitment activity slows due to employer caution

The rate of job growth in the UK slowed to its weakest in five months during May, as recruiters became more cautious about their hiring activity due to economic uncertainty in the UK and the eurozone.

This is according to the latest Report on Jobs, from the Recruitment and Employment Confederation (REC) and professional services firm KPMG, which found that, despite the fact that employers are continuing to recruit, demand for staff has slowed for both permanent and temporary vacancies.

According to the report, recruitment consultants reported a modest rise in permanent staff placements during May, but the rate of growth in these placements was at its weakest for five months.

Meanwhile, temporary placements fell for a sixth consecutive month, as the rate of decline accelerated to its sharpest since July 2009. Respondents said that this was due to tighter client budgets and, in some cases, the effects of the Agency Workers Regulations.

Kevin Green, REC chief executive, said: “This month’s data shows employers are becoming more cautious about hiring and while there is still growth in permanent placements, the figures have been getting weaker over the last two months. Clearly the economic backdrop and the eurozone crisis are making some employers think twice before taking on new staff.

“What’s interesting are the niche areas that are seeing much stronger growth than the national average. In every month this year, the engineering and IT and computing sectors have seen solid increases in the number of workers recruited for permanent roles.

“Looking ahead, it’s likely that unemployment figures will rise over the next few months as another wave of young people leave education. We have a weakening jobs market, which will only improve once demand returns to the economy. More jobs being created in the private sector in 2012 is vital for our overall economic recovery so anything which boosts confidence is good news – the Jubilee and the Olympics may yet help us turn the corner.”

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