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Demand for temporary workers holds firm as hirers put off recruiting permanent staff

Demand for temporary workers holds firm as hirers put off recruiting permanent staff

•              Vacancies for permanent candidates still 20.5% down year-on-year

•              Demand for temps in finance and engineering markets up

Demand for temporary workers in financial services and engineering continues to rise as the ongoing economic uncertainty puts hirers off recruiting permanent candidates, according to research by the Association of Professional Staffing Companies (APSCo).

Vacancies for temporary workers in accounting & finance and engineering rose for the third consecutive month - by 37% and 3% respectively in March. Vacancies for temporary workers in accountancy & finance, however, are still 35% below the level seen last March while vacancies for temporary workers in the engineering sector are 5% higher than this time last year.

By contrast, vacancies for all professional-level temporary workers (bankers, lawyers, IT professionals etc.) declined by 1% in March and remains 10% below the level seen in March 2011.

 According to APSCo, the permanent recruitment market is still lagging behind demand for temporary workers – evidence that hirers are nervous about the economy and are keeping a close eye on permanent headcounts. Permanent vacancies for professional-level candidates fell by 3% in March, partially offsetting the rebound in the first two months of 2012. Permanent vacancies remain 20.5% below the level of March 2012.

 The research is from the APSCo Monthly Trends Report, which analyses job vacancies and placements across the UK professional staffing sector. The report compares data from thousands of vacancies and placements supplied by APSCo members who place professional candidates within the UK.

Ann Swain, Chief Executive for APSCo, comments: “The jobs market staged a rally at the start of the year, but has lost momentum over the past month. Demand for permanent candidates is still around a third down on last year. With the economy having flatlined during the past year it has been very difficult for employers to make all but the most essential hiring decisions.”

“Understandably, with the outlook still uncertain employers have turned to temporary workers to plug any immediate skills gaps. Temporary workers provide a flexible resource, allowing employers to deal with short term spikes in workload without having to add to fixed employment costs.”

She adds: “The engineering sector continues to defy the uncertainty in the rest of the market. With infrastructure investment at record levels, and exporters benefitting from the weak pound, demand for engineers should remain buoyant for the duration of the year.”

Caroline Hudson, Director at Argyll Scott, comments: “Many financial firms still have strict headcount limits in place and are finding it very difficult to get sign-off on permanent hires. The use of temporary workers has risen, partly to compensate.”

“There is significant demand for skills to work on implementing change management programmes in banks and other financial institutions. The project cycles tend to be of a fixed, short-term duration, so interim managers are often the preferred resource.”

According to APSCo, demand for IT skills has tailed off after rising steadily at the start of the year – though again, demand for temporary workers and contractors is holding up much better than demand for permanent staff.

Vacancies for permanent IT staff are still 24% below the March 2011 level. Vacancies for temporary workers/contractors in the IT sector are 8% below March 2011 levels.

John Nurthen of Staffing Industry Analysts says: “Demand for IT skills is being held back by subdued levels of business investment. Once businesses start to spend more of the cash sitting on their balance sheets, we should see increased demand for IT skills.”

“Demand for web development skills is strong, particularly in the retail and media sectors as businesses look to boost sales volumes online. This is partly being counterbalanced by a decline in the amount of public sector work and caution in the financial services sector.” 


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