The recovery in the jobs market is slowing, with recruitment activity for permanent positions last month growing at its most sluggish rate since January. Hiring activity for temporary and contract positions also showed the weakest increase since last December.
Although recruitment in both categories is still in overall growth mode, according to the ‘Report on Jobs’ survey published by the Recruitment and Employment Federation (REC) and management consultancy KPMG, it is “only a matter of time” before the “impact of the government’s efficiency savings strategy” makes itself felt.
Bernard Brown, partner and head of business services at KPMG, said that, while the strategy was likely to leave hundreds of thousands of public sector joining the ranks of the employed, the “big challenge” would be to transfer as many of those jobs as possible over to the private sector through outsourcing and divestment. “Otherwise, the economy will be put under enormous pressure at all levels,” he added.
The research found that in June this year, the number of permanent placement rose to 60.7 – on a scale where 50 shows no change – down from 61.3 in May. Demand was highest in the construction and engineering sector, where recruitment hit 63.7 in June compared with 33.8 during the same period last year.
Hiring for professional and executive roles as well as IT jobs were also up at 62.7 and 61.4 respectively, although skills shortages were reported in both the high tech and engineering space.
But temporary and contract staff placements dropped to 57 compared with 59.2 the previous month, partly due to less demand from the public sector. High levels of youth unemployment were also a concern.
Kevin Green, REC’s chief executive, warned that, while about 20% of under 24-year olds were already out of work, the problem would only escalate as thousands more graduates and school leavers started looking for employment over the coming months.
“Youth unemployment is one of the most pressing issues we currently face in the UK and needs to be urgently addressed,” he said.