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Temp & perm billings up: KPMG REC

Temp billings rose at their sharpest pace for more than two years at the end of 2020 amid the uncertainty caused by the double whammy of Covid-19 and Brexit.

However, the latest KPMG and REC, UK Report on Jobs survey also signalled a renewed rise in permanent placements in December, as increased market activity and vaccine news led some firms to press on with hiring plans. At the same time, both permanent pay and temp wages rose for the first time since March, albeit modestly.

The report is compiled by IHS Markit from responses to questionnaires sent to around 400 UK recruitment and employment consultancies.

Increase in permanent placements

December survey data revealed the first increase in permanent staff appointments since September, though only slight. Recruiters indicated that the upturn was driven by increased market activity and greater confidence, partly due to vaccine news.  

Total demand for workers improved for the first time since September. The minor upturn was predominantly driven by an increase in temporary vacancies, the sharpest for 18 months, as demand for permanent staff expanded marginally.

UK recruiters signalled a tentative improvement in pay trends for both permanent and temporary workers in December. Starting salaries and temp wages both increased for the first time since March.

Redundancies and job security fears drove a further increase in the availability of both permanent and short-term staff in December, though the overall expansion rate was the softest recorded since April.

Regional and Sector Variations

There were mixed trends across the four monitored English regions. While permanent placements rose in the South of England, the Midlands and the North of England, London recorded a further decline.

The South of England, the Midlands and the North all registered marked increases in temp billings. London was the only monitored region to see a fall, which extended the current period of decline to 12 months.

Vacancies for 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 10 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, while Hotel/Catering saw the sharpest drop in vacancies.

Nursing/Medical/Care registered the sharpest rise in temporary vacancies during December, followed by Blue Collar. Of the four sectors to note lower demand for short-term staff, Hotel & Catering saw the steepest rate of contraction.

Weathering the new lockdown

 “With business cashflows under renewed pressure, helping employers protect and create jobs is essential,” said REC Chief Executive Neil Carberry. “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, says the emergence of a vaccine had bolstered market confidence, but the new national lockdown was sure to fuel further economic uncertainty, alongside preparing and adapting to the new relationship with the EU. “But with the UK leading the way on the vaccine roll out and continued government financial support, there is hopefully light at the end of the tunnel for both business and jobseekers,” he says.

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