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Employers turn to temporary workers to fill vacancies as double dip recession bites

Employers turn to temporary workers to fill vacancies as double dip recession bites  

Temporary placements up 7%, as permanent market falls 5%

9% slump in London’s recruitment sector

Graduate salaries down 18%

Employers are increasingly turning to the UK’s temporary workers base to fill vacancies, rather than recruiting permanent staff, according to the latest jobs data from the Association of Professional Staffing Companies (APSCo).

According to the latest data from APSCo, temporary job placements across the UK rose by 7% in the last twelve months (year-on-year), while permanent placements fell 5% (y/y) over the same period.

APSCo’s latest jobs data provides a snapshot of the UK’s professional recruitment market, with analysis across all professional-level sectors from accountancy and legal, to banking, engineering, IT and marketing.

While professional-level vacancies continue to fall for both permanent and temporary workers, (down 30% and 19% respectively, year-on-year) actual professional-level placements are only increasing in the temporary sector. The continuing economic uncertainty means that employers are reining in expenditure on permanent employees until the outlook becomes clearer. (see graphs below).

Ann Swain, Chief Executive for APSCo says: “This switch from permanent to temporary recruitment demonstrates how the UK’s professional recruitment market can respond flexibly to changes in the broader UK economy.”

“With the deepest double dip recession in 50 years, and amid on-going uncertainty over the Eurozone, employers’ confidence has taken a real dive. Many have turned to temporary workers in order to maintain their capacity, whilst not yet committing to any longer term increase in their overheads.”

APSCo points out that despite downturn, permanent professional-level recruitment is not yet at the lows seen in the nadir of December 2011. Compared to December 2011, permanent placements are up 25%, with vacancies up 8%.

Signs of recovery in IT and finance.

While permanent placements in accountancy and finance are down 15% (y/y), month on month figures reveal a slight improvement (2%). In line with the trend in the wider recruitment market, these sectors are continuing to take on temporary staff. Temporary IT placements rose 16%, while accounting and finance placements were up 18% (both y/y).

Says Ann Swain: “IT and finance and accounting were two sectors hardest hit by the recruitment slump at the end of 2011. It could be that businesses in these sectors had put the brakes on their hiring, but subsequently found that they needed to bolster their workforce to handle spikes in demand for their services.”

Not all permanent job-markets are contracting

APSCo’s survey reveals that not all permanent sectors are in decline. For example, the engineering sector is bucking the UK-wide trend, seeing an 11% increase in permanent hiring over the last year, while temporary placements fell 5%.

The media and marketing sector saw increases on both fronts, with permanent placements up 9% (y/y), and temporary placements up 8% over the last year.

Slowdown in London’ staffing sector – led by collapse in banking recruitment

While the UK’s professional staffing sector contracted by 5% as a whole, data on online recruitment trends reveals that London saw the biggest fall in hiring, down 13% across the professional staffing sector.

According to APSCo, this was led by a slowdown in recruitment activity in the banking and insurance sector, down 32% in London (y/y) and down 29% across the whole of the UK (y/y).

Graduate pay slumps 18%

APSCo says that graduate starting salaries continue to be squeezed as employers benefit from increasing competition for jobs amongst graduates. Data compiled by Broadbean shows that average graduate salaries have plummeted 18% from this time last year to &pound23,261.


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