Recruitment market remarkably stable in 2006

Four in 10 UK employers (41%) planned to recruit additional staff in the third quarter of 2006, according to the Chartered Institute of Personnel and Development (CIPD) and consultancy KPMG’s latest Labour Market Outlook survey.

The study of 1,435 UK private and public sector organisations showed a slight decrease from recruitment intentions in the previous quarter (down 2%) but a 5% rise on the same period in 2005.

Recruitment plans have remained relatively stable throughout the year, with the outlook for autumn 2006 running parallel to that of spring 2006 at 41% – in marked contrast to the wide variations shown in 2004 and 2005.

Over the longer term, the outlook shows a different trend. Autumn 2006 showed a 10.5% drop from autumn 2004 when it was 52%, and the summer 2006 quarter showed a 15.3% decrease from summer 2004 when it was 58%.

While recruitment activity has broadly stabilised in 2006, it has not yet returned to 2004 levels, the CIPD said.

Smaller employers have bigger recruitment plans

The CIPD/KPMG survey indicated that, in general, the smaller the company, the bigger the recruitment plans, while businesses with under 500 employees are most likely to hire.

Almost three-quarters of employers (73%) with less than 10 staff expected to hire new staff in the second half of 2006. And about seven in 10 (68%) companies employing between 10 and 49 staff expected to recruit, followed by 54% of businesses with 50-99 employees.

More than one-third (36%) of employers with between 500 and 999 staff planned to increase numbers, compared with 31% of businesses with 10,000-20,000 staff.

Employers with 5,000-9,999 employees were the least likely to recruit, with just 19% planning to take on extra staff.

Less than a third (29%) of businesses with more than 20,000 staff planned to recruit.

Northern Ireland and London stay upbeat

Employers in London and Northern Ireland are the most optimistic about their recruitment intentions over this quarter, with about half (53% and 50% respectively) planning to take on more staff, the CIPD/KPMG’s Labour Market Outlook survey showed.

Companies based in London and Northern Ireland were significantly more buoyant in their recruitment outlook than most other regions, followed by the North West (45%), Scotland and the North East, both at 39% respectively.

Wales was cautiously optimistic, with more than one-third (37%) of Welsh employers expecting to hire more staff over the coming months. One-third (33%) of West Midlands employers also expected to recruit, followed by Yorkshire and Humberside (31%) and the South East (also 31%).

Organisations in the East Midlands and the East of England were the least optimistic, with just 15% of East Midlands companies planning to recruit, compared with less than one-quarter (22%) of those in the East of England.

“The findings for London are probably linked to wider evidence of a buoyant City job market, with frequent reports of growing employment and large bonus payments and high demand for office space,” according to the report.

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