The war in Iraq and its aftermath is having a damaging effect on the UK
labour market with firms being very cautious over staff recruitment, according
to research.
A monthly review of the labour market from the Recruitment and Employment
Confederation and Deloitte and Touche shows the number of full-time jobs placed
by recruitment consultancies in March fell for the first time in 13 months.
Temporary staff placed also fell for the first time since December 2001,
according to Report on Jobs. Senior staff recruitment decreased dramatically,
with the service sector witnessing its biggest decline in recruitment through
consultancies since July 1996.
Recruitment advertising by private sector firms fell sharply but public
sector recruitment activity – unchanged since February 2003 – propped up the
market.
The survey states that firms have adopted a ‘wait and see’ policy to staff
recruitment due to heightened economic uncertainty from the war.
Businesses’ cautious approach to staff recruitment along with the sharply
rising availability of staff – for the 22nd consecutive month – means full-time
employee salaries fell for the first time in six months.
Brett Walsh, head of UK human capital at Deloitte and Touche, said:
"Business uncertainty has heightened since the start of the Iraq war, and
this resulted in a generally subdued job market in March.
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"Demand was shown to have been particularly weak at the upper end of
the labour market."
