Candidate placements continued to rise at a solid rate in April, underpinned by robust demand for staff
Published: 09/5/05
Contact: Ali Agmen-Smith Deloitte Public Relations + 44 (0) 207 303 0514
The Report on Jobs, published today by the Recruitment & Employment Confederation and Deloitte, provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies and employers, as well as data on national newspaper recruitment advertising.
The latest REC/Deloitte Report on Jobs showed that recruitment consultancies’ permanent staff placements and temporary staff billings continued to rise at robust rates in April. Higher placements were supported by a further strong improvement in demand for staff at employers, though the rate of demand growth eased slightly to a sixteen-month low. Improvements in demand were recorded for seven of the eight main types of permanent employee, and for all categories of temp staff. Meanwhile, the availability of candidates to fill vacant positions at companies continued to deteriorate sharply, but the rate of decline eased to the slowest in fourteen months. Pay inflation remained sharp, with permanent staff salaries rising at the highest rate in seven months. Average temp staff pay rates were also up, but at the least marked rate in fourteen months.
Commenting on the latest report, Ashley Unwin, a partner in the consulting business at Deloitte said:
"The continued demand for permanent staff in April contributed to sharp pay inflation. Organisations need to consider the impact of high starting salaries on the expectations and longer term commitment of existing staff. "
Also commenting on the latest report, Marcia Roberts, deputy chief executive at the REC reported that:
"In the past two years the UK job market has performed strongly and the demand for staff is continuing to rise. However, we are starting to see the early signs that this demand is beginning to plateaux, in particular across the temporary sector. We are entering a crucial period for the UK labour market and the new Labour government should think very carefully before implementing any new legislation that may restrict employment creation and push the labour market into reverse. UK business needs the Government to fight its corner in Brussels, particularly on key European employment legislation such as the Agency Workers Directive and the Working Time Directive."
"In April we also witnessed the sharpest drop in manufacturing sector staffing levels for two years. The recent redundancies at MG Rover and the knock on effect it has had on suppliers highlight the sensitivities of the UK jobs market" concluded Roberts.
Solid growth of recruitment activity April’s Report on Jobs survey pointed to a further healthy expansion in recruitment activity. Both permanent staff placements and temporary staff billings were up for the twenty-third consecutive month, posting solid rises on the previous month. However, a divergence in growth trends was observed, suggesting a slight shift in employers' preference to hire permanent ahead of temp staff. Permanent staff placements growth quickened for the second month running, to the strongest in four months. Meanwhile, the rate of increase of temp staff billings eased for the sixth month running, to the weakest in twenty-one months.
Growth of actual employment held steady Actual private sector staffing levels continued to rise at a moderate pace in April, according to the CIPS/NTC Research Employment Index. Service sector employment growth quickened from the previous month, while growth of construction sector staffing levels remained robust. Manufacturing sector employment, however, was down in April following March's gain.
Demand for staff up strongly again The Report on Jobs Vacancies Index continued to signal a strong rate of improvement in demand for staff in April, despite falling slightly to its lowest level in sixteen months. Growth of demand for permanent staff remained sharper than for temp staff. Seven categories of permanent staff recorded improvements in demand, led by Hotel & Catering staff. National press recruitment advertising in the UK was down 8.3% on the same period a year earlier in March. The Press Recruitment Advertising Index pointed to the sharpest annual rate of decline in over two years.
Candidate availability declined at a slower rate The overall availability of candidates to fill positions at employers was down sharply again in April, with consultancies reporting that a number of key skill-sets were still in short supply. However, the rate of deterioration in candidate availability eased to the slowest in fourteen months. Permanent staff availability again fell at a more marked rate than temp availability.
Sharp inflation of average pay rates Strong demand for staff and shortages of suitable candidates contributed to a further round of strong pay inflation in April. Salaries awarded to successful permanent candidates rose at the sharpest rate in seven months, as companies raised incentives to attract the best staff. Although temp staff pay rates also posted a solid rise from March, the rate of increase slowed to the least marked in fourteen months, mirroring the easing trend in demand growth.
NTC Research (technical/data queries) Chris Williamson Tel: 01392 202 36 Jack Kennedy Tel: 01491 418687
Notes to editors The Report on Jobs is a monthly publication produced by NTC Research on behalf of the Recruitment & Employment Confederation and Deloitte. The report features original survey data which provide the most up-to-date and comprehensive monthly picture of recruitment, employment and employee earnings trends available.
The Report features original research data from NTC Research, collected via questionnaire from a panel of 400 UK recruitment and employment consultancies. In 2000, some 1,326,000 people were employed in either temporary or contract work through consultancies and over 450,000 people were placed in permanent positions through consultancies. Data for the monthly survey were first collected in October 1997 and are collected at the end of each month, with respondents asked to specify the direction of change in a number of survey variables.
As the leading UK human resources (HR) consultancy, Deloitte recognises the importance of comprehensive and reliable HR and job data. The NTC Report on Jobs provides such authoritative and timely information. This enables HR professionals to better understand, interpret and respond to the movements in the job market to deliver strategic value and bottom line impact as an informed business partner. Deloitte therefore believes Report on Jobs is an essential tool for the management kit-bag to help organisations win the war for talent and meet business objectives in an increasingly competitive and people critical environment.
With the exception of the Press Recruitment Advertising Index, all Index numbers are calculated from the percentages of respondents reporting an improvement, no change or decline. These indices vary between 0 and 100 with reading of exactly 50.0 signalling no change on the previous month. Readings above 50 signal an increase or improvement; readings below 50 signal a decline or deterioration. Reasons given by survey respondents for any changes are analysed to provide insight into the causes of movements in the indices and are also used to adjust for expected seasonal variations.
Recruitment Advertising in National Newspapers data is derived from original survey data collected from media owners by NTC on behalf of the UK Advertising Association together with information from Nielsen Media Research. The data from both NTC and Nielsen Media Research refer only to advertisements in UK national newspapers and therefore tend to reflect trends in the managerial, professional white collar and executive job markets.
Recruitment and Employment Confederation 36-38 Mortimer Street, London W1W 7RG. Tel: 020 7462 3260. Fax: 020 7255 2878
The REC is the association for the £26 billion private recruitment and staffing industry in the UK, with over 6,500 recruitment agencies and 8,000 recruitment consultants in membership. There are 1.5 million temporary workers registered with UK agencies, and up to 1 million temps are deployed in industry, commerce and the public services every day.
In this report references to Deloitte are references to Deloitte & Touche LLP. Deloitte & Touche LLP's Human Capital practice is the largest fully integrated HR consultancy in the UK with more than 700 consultants covering the complete spectrum of strategic human resources. Consulting services include: HR transformation, shared services and outsourcing; international and domestic tax, actuarial and pensions; executive and employee compensation and benefits. Globally, Deloitte &Touche LLP is one of the world's largest HR consulting firms with over 6000 staff in 140 locations.
NTC Research is one of the world's largest specialist providers of business research information, operating business surveys on behalf of blue chip clients. Current research includes continuous surveys providing original data on economic conditions in the UK, Germany, France, Italy, Spain, Netherlands, Austria, Ireland, Greece, Russia, Poland, the Czech Republic, Hong Kong, Japan and China. NTC surveys are widely used by governments, businesses and financial markets.
