Permanent job vacancies fall for first time in over two years

Wednesday, 09 November 2011 09:01

The number of permanent jobs in the UK has fallen for the first time in more than two years, according to the latest Recruitment & Employment Confederation (REC) and KPMG report on jobs.

The report reveals that there has been a small drop in permanent staff placements in October but the number of temporary jobs has continued to rise.

Firms have reported that concerns over the economic outlook has led them to hold off recruiting permanent staff in many instances and recruiting staff on a temporary basis for the time being whilst the latest economic developments play out.

The number of candidates looking for a permanent job increased at the fastest rate seen for nearly two years.

Kevin Green, the REC's Chief Executive, said: “The November report shows that the UK’s permanent jobs market has stalled for the first time since July 2009. The slowdown is due to a reduction in public sector employment and weakening consumer and business confidence.

"Therefore, the Government must do more to help especially in encouraging small private sector employers to take on young people.”

Salaries for new starters on permanent contracts stayed roughly the same in October. This was influenced by the increased demand for jobs and higher number of candidates that kept wage demands muted. The increase in the national minimum wage contributed to wage growth in the temporary staff sector.

Bernard Brown, Partner and Head of Business Services at KPMG said: “This month’s data presents a gloomy picture for permanent jobs. Nervous employers are placing recruitment decisions on hold amidst concerns over the economic outlook, in many cases choosing instead to plug gaps with temps.

“Whilst permanent employment opportunities have dipped into negative territory, overall the detail reveals this is heavily influenced by fewer employment opportunities in healthcare. There is some positive news with more permanent opportunities in IT, Finance and Accounting showing signs of improvement. However, we are still on a knife edge as we enter a critical time for European economic stability.”

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