Labour market propped up by public sector


The UK’s labour market is currently weaker than official figures suggest, according to the latest Report on Jobs from the Recruitment & Employment Confederation and Deloitte & Touche.

The survey provides a 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.

Recruitment consultants grew busier in November. The number of people placed in permanent jobs by recruitment consultants rose for the ninth month running in November, with the rate of increase accelerating for the second month in a row to hit a five-month high.

But this growth has been driven partly by growth in the public sector, especially in demand for nursing staff, while demand for staff at the top end of the private sector labour market has continued to fall. November saw a net drop in both manufacturing and service sector workforce numbers

As a result, total private sector employment continued to decline and the further improvement in staff availability caused by falling employment helped keep a lid on pay pressures.

According to Brett Walsh, head of human capital at Deloitte and Touche, the private sector is being supported by public sector demand.

“The latest survey points to a pick up in the demand for staff, and the rate of decline in press recruitment advertising has eased in recent months. But the public sector has remained a key driver behind this growth,” he said.

Permanent salaries awarded to those taking up permanent jobs rose for the second successive month in November, increasing at the fastest pace since June. However, the rate of growth remained only modest, reflecting the overall improvement in staff availability seen during the month. Similar subdued growth was noted for average temp hourly billings, though the rate of increase in fact slowed to a nine-month low.

Tim Nicholson, head of the REC says that although the level of available staff remains relatively good, strong overall demand from employers will quickly uncover skills shortages out in the marketplace:

”Employers currently experiencing difficulty recruiting the skills they need must take steps now to secure their future. Staff retention and developing home grown talent should be moving to the top of employers’ agendas,” he said.