Uncertain picture for UK jobs

May 07 2003 by Brian Amble Print This Article

The latest Latest Recruitment and Employment Confederation (REC)/ Deloitte and Touche Report on Jobs survey shows a significant contraction in demand for staff in April, as employers generally held off making any recruitment decisions whilst the economic outlook remained uncertain.

The survey draws on original survey data provided by recruitment consultancies and employers, as well as data on national newspaper recruitment advertising.

Permanent staff placements fell for the second successive month, dropping at the fastest rate since January 2002. Recruitment consultancies reported significantly weaker demand for permanent staff during the month, whilst billings from temporary staff declined slightly for the second month running. Agencies said that their clients had struggled to bring in enough work to warrant hiring temporary help.

The combination of good staff availability and weaker demand for staff saw permanent staff salaries decline slightly for the second consecutive month in April, whilst temporary staff pay rates remained broadly unchanged.

Brett Walsh, Head of UK Human Capital at Deloitte & Touche said that continuing business uncertainty in April had resulted in a significant contraction of demand for staff. "Many firms have now entered into a stage whereby their strategy to staff recruitment will be to see how business conditions shape up over the coming months before committing to any sustained recruitment activity," he said.

"April's data also showed that the rate of improvement of staff availability eased sharply, suggesting that candidates were also nervous about moving jobs in the current economic climate," he added.

The overall weakness of employment levels indicated by the recruitment industry survey was supported by the CIPS / Reuters Employment Index, which signaled a fall in employment for the twenty-third consecutive month in April. Furthermore, the rate of job shedding eased only slightly from March°¶s fifteen month record rate, as rationalization programs designed to reduce costs and improve efficiency resulted in further job losses in both the manufacturing and service sectors.

Demand for staff at the upper end of the job market was particularly weak while

recruitment consultancies reported that the overall availability of staff to take up vacant positions rose markedly.

Unsurprisingly, the free availability of staff continued to subdue pay pressures in April. In fact, recruitment consultancies saw permanent staff salaries decline slightly for the second consecutive month. Meanwhile, temporary staff pay rates remained broadly unchanged.