The Markit/REC Report on Jobs – Recruitment consultancies indicated a further rise in the number of people placed in permanent jobs during April. However, the rate of growth eased to a seven-month low amid reports of increased client uncertainty. Correspondingly, growth of permanent staff vacancies was the slowest since May 2013, but temp billings rise at faster rate.

Agencies’ temporary/contract staff billings increased at the strongest rate in just over a year. Temp vacancy levels also showed a firmer trend, rising at a slightly faster pace than in March. 

Slower fall in candidate availability
The availability of staff to fill job vacancies continued to deteriorate in April. That said, rates of decline eased on the month. The latest fall in permanent staff availability was the slowest since January 2014, while temp availability decreased at the least marked pace in 31 months. 

Further rise in permanent salaries; temp pay boosted by National Living Wage
Average starting salaries for people placed in permanent jobs increased further in April. The rate of pay growth remained marked, despite easing to a three-month low. Temp pay meanwhile rose at the fastest pace since July 2007, with panellists frequently citing the inflationary impact of the new National Living Wage.

Regional and sector variation
Permanent placements rose across all four monitored English regions, with consultancies based in the North reporting the strongest expansion. London led a broad-based rise in short-term appointments during the latest survey period.   Demand for staff remained stronger in the private than the public sector, with permanent workers in the private sector seeing the strongest growth. Public sector permanent staff were the only category to see a decline in demand for their services. 

All nine categories of permanent staff saw improvements in demand for their services during April. The strongest growth was signalled for Accounting/Financial workers, while the slowest growth was recorded for Construction employees. Growth of demand was broad-based across all nine types of temporary/contract employment during April. The fastest rate of expansion was signalled for Nursing/Medical/Care staff. IT & Computing workers saw the slowest rise.

REC chief executive Kevin Green says: “The UK labour market is going through an unsettled patch, with uncertainty around a possible Brexit and the impact of the National Living Wage changing employer behaviour with a switch from permanent to temporary hiring. Employers are turning to temps and contractors to provide a flexible resource, as a way of hedging any possible change to the UK’s relationship with Europe, and the implications this would have for the economy. There are concerning signs that permanent hiring in the public sector is in decline. The NHS is struggling to fill permanent roles and this is pushing up demand for agency nurses and locum doctors as hospitals try to ensure safe staffing levels. This is a major concern because healthcare recruiters tell us that since the introduction of mandatory pay caps imposed by government, candidates are opting to leave the NHS to work in the private sector or to go abroad.”