Perm appointments rise amid renewed business confidence

UK recruiters saw a further increase in permanent appointments in January, according to the latest KPMG/Recruitment & Employment Confederation’s ‘UK Report on Jobs’.

Amid renewed business confidence following December’s decisive general election, the report reveals the number of staff vacancies across the UK rose at the quickest pace for 10 months in January, with growth largely driven by improved demand for permanent workers. While perm staff vacancies expanded at the steepest rate since last March, growth of demand for temp workers was unchanged from December.

The data also signalled softer increases in starting pay for both perm and temp workers in January. While solid, this latest upturn in permanent starting salaries was the slowest seen for three-and-a-half years, while temp wage inflation was among the softest recorded since late-2016.

Slower rises in starting pay was witnessed despite further sharp falls in candidate supplies. Although the drop in permanent worker availability eased slightly at the start of 2020, the reduction in temp staff numbers was the most marked seen since last June.

Across the regions, permanent staff appointments rose in the North and the South of England, but fell in London and the Midlands. London and the South of England both recorded lower temp billings during January after increases in December. However, growth maintained in the Midlands and the North of England.

Increases in demand for perm staff were recorded across all 10 monitored job categories except retail at the start of 2020, with the quickest expansion in vacancies seen in accounting/financial, closely followed by engineering.

Most of the monitored sectors noted greater demand for short-term workers in January, with the strongest increase seen in engineering. Just two sectors recorded lower demand for temp workers – retail and IT & computing.

REC CEO Neil Carberry said: “It’s good to see that businesses have grown in confidence over the past two months and taken the opportunity to restart hiring. Permanent placements are up again, and demand for staff has risen at the quickest rate for 10 months. This is good news for employers, recruiters and candidates – all three can now get on with making the economy flourish in 2020.

“But the upcoming IR35 reforms are having a negative impact on the availability and placement of temporary workers. It is vital that people pay the right amount of tax and that the system is fair, but for both of those things to happen we think the government needs to pause and think again on how IR35 changes. The temporary labour market is being stifled, and that’s not good for employers or our economy.”

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