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BUSINESS NEWS - UK - Vaccine News And Increased Market Activity Lead To Uptick In Permanent Placements

Posted 12th January 2021 • Written by •

Permanent staff appointments in the UK saw a slight uptick in December, the first since September, according to the latest Report on Jobs by the Recruitment and Employment Confederation and KPMG.

Recruiters indicated that December’s upturn was driven by increased market activity and greater confidence, partly due to recent vaccine news. Nonetheless, lingering uncertainty over the coronavirus pandemic and Brexit led to the strongest increase in temp billings for over two years as companies opted to take on short-term workers. Temp billings have now risen for five consecutive months.

The Total Vacancies Index rose from 47.0 in November to 50.6 in December, to signal a renewed increase in overall demand for workers. December’s data showed a sharp increase in temp vacancies, with the rate of growth the quickest for a year-and-a-half. Demand for permanent workers meanwhile rose for the first time since September at the end of 2020. However, the upturn was only slight.

Vacancies for both permanent and temporary staff in the private sector rose during December. The increase in demand for permanent staff was modest overall, while temp roles expanded sharply. In contrast, demand fell for both permanent and temporary staff in the public sector, with the former noting the steeper rate of decline.

Half of the ten monitored job categories recorded greater demand for permanent staff at the end of 2020. IT & computing and nursing/medical/care saw the steepest rates of expansion. Hotel/catering meanwhile saw the sharpest drop in vacancies.

At the same time, nursing/medical/care registered the sharpest rise in temporary vacancies during December, followed by blue-collar.

The Report also showed slower increases in both permanent and temporary staff supply in December.

The REC’s report also found a further rise in the number of candidates seeking permanent roles during December. The rate of expansion remained sharp, despite easing to an eight-month low. Recruiters frequently linked higher permanent labour supply to redundancies related to the pandemic and people seeking new roles due to concerns over current job security.

Recruitment consultancies pointed to a further expansion of temp candidate supply in December, thereby stretching the current period of growth to ten months. The pace of expansion eased for the fifth month in a row, however, and was the softest seen since March.

December’s data signalled a fractional rise in salaries awarded to new permanent joiners, ending an eight-month period of falling pay. Average hourly rates of pay for temporary staff across the UK increased for the first time in nine months in December.

Neil Carberry, Chief Executive of the REC, said, “The underlying strength of the British economy shone through in the December jobs figures. The biggest expansion in temporary recruitment since October 2018 shows how important the flexible jobs market is to that performance. Growing permanent placements and starting pay also emphasised the resilience of our economy.”

“The important thing now is to maintain as much of that momentum as possible through the new lockdown,” Carberry continued. “With business cashflows under renewed pressure, helping employers protect and create jobs is essential. We need a long-term plan to support businesses across the supply chain – not just those required to close. This should include wider-spread reductions on business rates, support on VAT repayments and support for self-employed business owners previously cut out of schemes. We need big ticket items now, like a reduction in the cost of furlough and employers National Insurance to help firms retain and hire staff in the coming months, alongside delivery of the vaccine.”

James Stewart, Vice Chair at KPMG, said, ““The emergence of a vaccine did bring more confidence to the jobs market in December with a small increase in permanent appointments. Temporary billings were also sharply up across the UK although London was a notable exception. However, we will have to see what January brings with a new national lockdown sure to fuel economic uncertainty, alongside preparing and adapting to the new relationship with the EU.”

The government announced this morning that 1.3 million people in the UK had received the first dose of a Covid-19 vaccine.

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