Employers are cautious over hiring

By Natasha Roberts

Date: Tuesday 12 Jun 2012

A modest rise was seen in the number of permanent positions offered by UK employers in May, while temporary placements have dropped to almost a three-year low, two recent surveys have revealed.

A report by the Recruitment and Employment Confederation (REC) and KPMG shows that while UK employers are continuing to offer permanent jobs, the rate of growth dropped to its weakest level seen over the past five months. Temporary appointments declined for a six consecutive months.

Manpower Group, which surveyed 2,100 UK employers, found that a balance of +1% of employers were looking to hire staff last month, indicating that the jobs market is still in positive territory, slightly lower than the outlook of +2% in the second quarter of 2012.

The balance number is calculated by subtracting the percentage of respondents who are not looking to add to staff numbers from the percentage who are.

The bigger firms are leading the way, according to the data, while smaller firms and start-up companies are lagging behind.

REC Chief Executive Kevin Green said: "This month's data shows employers are becoming more cautious about hiring and while there is still growth in permanent placements, the figures have been getting weaker over the last two months.

"Clearly the economic backdrop and the Eurozone crisis are making some employers think twice before taking on new staff.

“Looking ahead, it’s likely that unemployment figures will rise over the next few months as another wave of young people leave education. We have a weakening jobs market which will only improve once demand returns to the economy."

Regionally, the employment outlook for London is also firmly in positive territory with a score of +3%, while the South West, South East and the East of England gained a score of +5%. Contrastingly, Wales has an outlook of -5%, while in the North of the UK, Scotland scored -6% and both the North East and the North West were flat at 0%.

The East Midlands had the strongest outlook of +12%, while the West Midlands achieved a more modest +2%.

“The UK’s employment outlook continues to keep its head above water. When you’re going head to head with a return to recession at home and a burgeoning Eurozone crisis, by rights the jobs market should be in free fall - but that’s not what we’re seeing. Firms are still looking to hire albeit at a weaker pace than before but the sort of hiring that is going on is where you’d least expect it,” said ManpowerGroup UK Managing Director, Mark Cahill.

Pay levels remained pressured, with only a modest increase seen in the salaries of permanent staff and temporary staff pay grew at its weakest rate since the start of the year.

NR

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