UK jobs market shows early signs of recovery

The jobs market is beginning to show signs of improvement as the number of people gaining employment has declined at the slowest rate for more than a year.

The Report on Jobs by the Recruitment and Employment Confederation (REC) and KPMG showed that the index reading for the number of people placed in permanent positions in June was 48.6 – on a scale where 50 indicates no change – which was the slowest rate of decline in 13 months. In May, this figure was 41.7.

The number of vacancies available in June also declined at a slower rate with an index reading of 39.2 – compared with 34.4 during the previous month.

Meanwhile the sharp increase in the number of people looking for work has slowed. The rise in availability of permanent staff rose to an index reading of 74 – compared with 75.1 in May – which was the smallest rise in nine months. The rise in temporary and contract staff was indicated by an index reading of 76.7.

The rate of decline in the amount new permanent employees were being paid continued to decrease, but this decline was the slowest since December 2008, with an index reading of 41.8.

Kevin Green, chief executive of the REC, said while the results were positive, he was concerned the public sector would stop recruiting to cut costs, which could prevent the jobs market from recovering fully.

“The UK jobs market shows signs of life,” he said. “While the public sector has continued to recruit, it is now critical that demand returns to the private sector to negate the potential public expenditure constraints that we are likely to see over the next few years, which could in turn hinder a full recovery of the UK jobs market.”

But Mike Stevens, partner and head of business services at KPMG, warned it was still too early to talk of a recovery in the jobs market. He said the continued improvements could be attributed to employers’ attempts to seek alternatives to redundancies.

He said: “One reason why we see continued improvements may be that more UK employers are asking staff to work reduced hours for lower pay in return for less aggressive redundancy plans. This approach may have played a part in moderating the impact on employment during the current recession.”

In June the CBI praised employers for adopting more flexible working options to avoid redundancies during the recession.

Comments are closed.