Latest research shows weakening jobs market as credit crunch bites

Posted: 09/01/2008 – Recruitment Consultant Magazine
Author: Online staff

December’s Report on Jobs, from the Recruitment and Employment Confederation (REC) and KPMG, released today, contains worrying signs for the UK labour market as well as the economy as a whole.

The research found that permanent staff appointments rose at their slowest rate in fifty-four months, while temp billings increased at the weakest pace for twenty months. Pay inflation also fell back reflecting slowed growth in demand for staff and easing skill shortages.

Commenting on the latest survey results, Alan Nolan, Director at KPMG said: “As the full impact off the credit crunch on the economy is still uncertain, businesses are becoming more cautious. Thus, the growth in both permanent placements and temporary demand for staff continued to slow last month. There is even speculation of redundancies within specific sectors such as HR and investment banking. In the coming months, employers will be reviewing resourcing requirements and either considering redundancies or maintaining a flat headcount as a way of riding out the storm.”

Helen Reynolds, acting CEO of the REC maintained an upbeat message adding: “Despite demand for staff slowing, and much speculation that the credit crunch is already having an adverse effect on the jobs market, the recruitment industry remains reasonably upbeat about job prospects in 2008. On a general level, there are still other drivers for the demand for staff. Factors such as the imminent change in workforce demographics and the need to replace retiring employees will mean that employers will need to rely on temporary and permanent employees to meet resourcing challenges, keeping the labour market buoyant.”

“Skills shortages remain a challenge. With welfare reform firmly on the government's agenda, the key focus for 2008 must be employability. It's about matching the right skills to the right jobs and it's crucial that employers and the government utilise the experience and expertise of the private recruitment industry to help make this a reality.”