01/05/2012

REC finds Permanent Job Market Growing in First Quarter 2012

A joint report released this week by the Recruitment and Employment Confederation (REC) and audit and tax advisor KPMG found that the number of new permanent jobs being created in the UK has risen during the first quarter of 2012.

The number of permanent job vacancies in March 2012 was the highest recorded for over eight months. Ronnie McCombe, partner at KPMG, commented, “It’s encouraging to see permanent placements in positive territory for the third month in a row in 2012. This provides further hope that the employment market will win through to a stronger recovery as the year progresses.  Sectors such as IT/Computing and Engineering/Construction continue to perform well.”

The report was compiled after REC surveyed 400 of its members and found that 40 per cent of respondents said that they had placed more people in permanent positions than they had the month before. A large number of these were in IT jobs due to the continued growth in the computing services sector, where IT recruitment consultancies recorded particularly strong growth.

Tom Hadley from the REC said the rise in permanent appointments and vacancy growth was a "positive indication of increasing employer confidence". He added, "Recent tax changes announced in the Budget, the Youth Contract and reductions in red tape for businesses that came into effect this month, should further boost employer confidence and accelerate hiring activity."

People Management, the journal for HR professionals, pointed out that while the number of permanent jobs is on the rise, the number of temporary vacancies has declined over the same period. Furthermore, the number of unemployed stands at 2.67 million and is still rising.

During her recent piece for People Management, Claire Churchard indicated that she believes the change to Agency Workers Regulations introduced at the end of 2011 is a key reason for the decline in temporary vacancies. Temporary workers who have worked with the same organisation for 12 weeks are now entitled to additional rights and benefits. After the 12 week period, temporary workers are given equal rights to permanent employees, making them less of a cost effective and attractive option to employers, often leading organisations invest more recruitment resources into hiring on a permanent basis instead.

Mr McCombe agreed with this hypothesis, stating: “Some of the rise in permanent placements appears to stem from employers simply switching temporary workers to permanent status due to the higher entitlements that the Agency Worker Regulations have given them.”