Recruitment and Employment Confederation and KPMG Report on Jobs reveals rise in hiring

Recruitment and Employment Confederation and KPMG Report on Jobs reveals rise in hiring

The Recruitment and Employment Confederation (REC) and KPMG Report on Jobs has shown that permanent placings rose in December.

The measures for the report are as follows: “Unless indicated, any reading above 50 signals an increase or growth on the previous month. Anything below 50 indicates a decrease or contraction. The greater the divergence from 50, the greater the rate of change.”

For example, permanent placings rose (55.5), but not as sharply as the previous month (57.1) which was a seven-month high.

Temporary and contract billings increased at a slower pace during the same period (56.2, compared to 57.4). Permanent and temporary candidate availability has declined (35.1 and 37.2 compared to 33.3 and 35.5 respectively last month), but the rate of this decent has alleviated.

The wages of permanent staff continued to grow in December (58.7), while the pay packets of temporary and contract staff eased to its lowest rise in 21 months (55.3).

Kevin Green, REC CEO, said: “The UK labour market is in great shape at the start of 2016 but some major challenges lie ahead. 

“Skill shortages are a real threat to continued growth in many industries. With talent at a premium, employers will try to attract staff by increasing starting salaries. On general wage growth, as many businesses align annual pay rises to the rate of inflation, we anticipate that growth will remain at 1.5 to 2.5%. 

“Businesses will need to manage the introduction of the National Living Wage, which will also have a major impact on pay levels. We wait with some trepidation to see the effect it will have on demand for staff, particularly in low-pay sectors such as healthcare. 

“The other bump on the road for business is the EU referendum, which is likely to create uncertainty which could lead to a reduction in hiring.”

Bernard Brown, Partner at KPMG, said: “Hiring remained slow but steady during December, with businesses and candidates keen to complete negotiations before Christmas. We are beginning to see a shift away from short term, low risk hiring, with demand for permanent staff outpacing that for temporary workers. This indicates businesses’ confidence is steadily solidifying, leading to an increased willingness to make long term investments in their workforce.”


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