Jobs: Decline in permanent appointment gathers pace, says report

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PERMANENT staff placements decreased for the second month running in November, according to the Recruitment and Employment Confederation (REC) and KPMG Report on Jobs.

The report is compiled from survey data provided by recruitment consultancies and the report authors say although moderate, the rate of decline quickened to the sharpest since July 2009.

Kevin Green, chief executive of REC, said: “This month’s Report on Jobs from the REC and KPMG highlights a rapidly declining jobs market. The market has been slowing since May but this slowdown has accelerated in the autumn. This is being driven by the double whammy of falling business and consumer confidence.

“This is bad news for those out of work and, as a consequence, we expect unemployment to rise in December and January. On a positive note, however, the report shows that temporary staff appointments are still growing, albeit at a decreasing rate.

“The government has done as much as it can in the short term to remove restrictions to employment and stimulate demand. However, if confidence doesn’t return quickly to get the jobs market moving again, the government may need to take more radical action in the New Year.”

Bernard Brown, partner and head of business services at KPMG added:“This month’s Report on Jobs makes grim reading. Given the uncertainties of the European market, the government’s recent stimulus package could not have come sooner, as unemployment creeps ever higher. Whilst most commentators suggest unemployment will peak lower than 3 million, this figure may be tested in the year ahead.

“Time will tell if recent interventions are enough to reverse the worrying trend of the last few months. If so, we should pick this up in our statistics over the next few months.

“Bright spots in an otherwise gloomy data set were that the agencies surveyed reported rising demand in permanent placements for engineering and construction staff ahead of this time last year, and demand also rose for IT and computing staff, together with the executive / professional and secretarial / clerical categories. But these isolated sectors do not compensate for an overall decline in permanent placements.

“According to the survey panel, economic uncertainty is resulting in a number of employers placing jobs on hold and taking longer to make recruitment decisions. Last week’s autumn statement contained a number of welcome measures aimed at helping businesses to grow and to ease red tape around employment but they are unlikely to make much difference in the short term.”