Permanent placements have grown at their fastest pace in February since July 2007, according to the latest Report on Jobs from the REC and KPMG.

Temporary/contract staff billings also rose, although this latest rise was the slowest in three months.

The rate of inflation of permanent staff salaries rose to a 20-month high in February, while temporary/contract staff hourly pay rates also marginally increased for a second consecutive month. 

Candidate supply to fill vacancies continued to rise in February, but at a slower rate, with these latest increases in both permanent and temporary/contract staff availability the weakest since April 2008.

Kevin Green, the REC’s chief executive, says: “The UK jobs market is continuing to improve. Increasing employer confidence has resulted in the best performance we’ve seen in permanent employment for two and a half years. High-end sectors such as IT are showing particularly strong growth and we are also seeing significant increases in demand for admin and back-office support.       

“Looking ahead, there are indications that recruitment in the public sector could drop off fast. We question whether the public sector has the right capability in place to lead the necessary transformation and put in place staffing structures that will keep costs down while improving public services. Flexible working must be seen as part of the cost solution, rather than the problem.”

Andy Robling, director at Hays Public Services, says: “Job cuts in the public sector would inevitably mean a threat to service delivery and ongoing reviews will be crucial to determine whether they can continue to be delivered more efficiently with fewer resources. There will be an increasing requirement for shared services, as well as greater collaboration between public sector organisations, and the outsourcing of processes. Professionals with experience in transformation and change management will be sought after as the public sector seeks to tackle the challenges ahead.”

Bernard Brown, partner and head of business services at KPMG, says: “The latest figures seem to confirm that the UK jobs market is on the road to recovery. Permanent job placements are growing at their fastest pace since July 2007, with both vacancies and salaries increasing. Sectors such as IT & computing as well as engineering and construction that were particularly hit by recession are clearly on the rebound.

“However, this all comes with one big warning: the impact of the inevitable public sector recession on the jobs market has yet to be felt and will be played out over the next six to 12 months.”