Permanent vacancies increase 29 percent year-on-year. Financial Services and IT lead the way in jobs boom. Salaries across all professional sectors were up by a robust 3.7percent year-on-year.

Professional recruitment firms now have 29percent more vacancies on their books than this time last year according to new survey data from the Association of Professional Staffing Companies (APSCo). Its latest research comes as official figures reveal that that the UK was the G7’s strongest growing economy last year with GDP rising by 2.6percent – representing the healthiest increase since 2007. In comparison, the US enjoyed GDP growth of 2.4percent across 2014. The EY ITEM Club's winter forecast predicts that UK GDP will grow by 2.9percent in 2015, up by 0.5percent compared with its previous estimate in October.

Growth across the board with Financial Services and IT showing particular signs of strength.

Beneath this headline figure, the January data from APSCo reveals that growth in the professional staffing market continues to climb across all of the trade association’s core sector groups. Permanent vacancies across finance & accounting and IT, for example, up year-on-year (17percent and 31percent respectively). This is in keeping with the Prime Minister’s vision that Britain will become the ‘jobs factory of Europe’, as he announces a series of manifesto commitments designed to reduce unemployment to the lowest among the G7 countries. The trade association’s data reveals that Finance and IT are performing particularly well which can be attributed to a number of burgeoning areas. Looking at the former, growth can be largely credited to greater economic confidence and the resulting investment across this area.

This is corroborated by research from the Confederation of British Industry (CBI) which found that Britain's financial sector reported the biggest upsurge in business since 1996 in the final three months of last year. Similarly, business group TheCityUK has recently revealed that London has more finance and professional services workers than ever before. Looking more closely at the IT sector, much of the jobs growth has been around the ongoing investment in improving user experience. Organisations are increasingly investing in UX design as they strive to keep pace with rapidly advancing technologies and user expectations. The fact that it is now widely recognised that improved user experience has a significant impact on company performance suggests that this trend shows no sign of abating.

Salaries reflect vacancy growth

APSCo’s figures also reveal that median salaries across all professional sectors were up by a robust 3.7percent year-on-year. This overall growth is characterised by notable fluctuations in terms of sector, with Engineering, Financial Services and IT recording uplifts of 10.5percent, 5.3percent and 2.8percent respectively. Ann Swain, Chief Executive of APSCo comments: “As the UK takes the podium for the world’s fastest growing advanced economy, it is clear that this bright, fresh economic landscape will continue to have a positive impact on recruitment levels across the UK. The fact that vacancy numbers within Finance are once again showing significant signs of improvement reflects the reality that the recession is now well and truly behind us. It seems that London has undoubtedly regained its crown as one the most eminent international financial centres – and the value that brings to the UK economy should not be under-estimated. There is no doubt that the UK remains a world-leading place to do business. ”
John Nurthen, Executive Director, Global Research for Staffing Industry Analysts, which compiles the report for APSCo, comments: “It’s reassuring that hiring trends for both permanent and temporary/contract staff have continued their strong momentum into 2015. While ongoing uncertainties regarding the broader economic climate remain, unemployment levels across Europe have been gradually coming down since Summer 2013 so there’s little reason for optimism to be dented as Spring approaches.”

Changes to intermediary reporting requirements do not go far enough, says IPSE:

IPSE has issued a warning to Government that new reporting requirements will be burdensome for businesses and will distort the contractor market place. This follows the onshore intermediaries’ legislation introduced last year. New regulations will require intermediaries – typically agencies – to report the personal details of all ‘workers’ they supply to clients where employment taxes are not deducted at source. Despite strong protests from IPSE, the regulations will also apply to independent professionals who operate through their own limited company. The regulations have been tempered by HMRC in the wake of fierce criticism by IPSE, but the changes do not go far enough, according to Andy Chamberlain, Senior Public Affairs Manager at IPSE: “The original proposals required intermediaries to report on individuals for three years, even if the engagement only lasted a few weeks. This was ludicrously excessive, as we pointed out to HMRC, and we are pleased this has been dropped to one year. We are also pleased to see that some personal details such as title, hours worked and passport number are no longer required. These are important concessions but they do not address the inherent impropriety of the regulations, particularly with regard to the way they impact limited company contractors.”

IPSE believes where the ‘worker’ operates through a limited company, the reporting should be restricted to company information only. This would reflect the business to business nature of the contract with the agency and it would be in keeping with HMRC guidance on how the legislation interacts with these professionals. Instead the regulations will force agencies to ask limited companies to supply personal details of their director(s) which includes their national insurance number. IPSE believes it is entirely inappropriate for one business to ask another for the personal details of its employees and then report those details to HMRC. Chamberlain says the new regulations will also prevent professionals from subcontracting: “Perhaps the most worrying aspect of this legislation is the impact it will have on those independent professionals who subcontract out work to others. The rules could lumber the original contractor with the reporting burden. Subcontracting out work can be beneficial to all businesses in the chain yet these regulations will strongly discourage it, leading to a distortion in the marketplace.” Chamberlain believes HMRC has not properly considered the consequences of the legislation:

“We have clearly told HMRC, both in our written responses to the various consultations and in face to face meetings, that these rules will be damaging for limited company contractors and the agencies that place them. We have asked them why limited companies cannot be carved out from the reporting requirements, particularly as including them protects absolutely no revenue. We haven’t been satisfied with the answers they have given which is why we are now seeking a legal view. IPSE has engaged solicitors to examine the possibility of challenging the legislation. They are seeking answers from HMRC on IPSE’s behalf.” Unless the draft legislation is further amended, the new reporting regulations will come into effect from April this year.