Research reveals two speed labour market

April's Report on Jobs published by the Recruitment and Employment Confederation and KPMG, shows that the recent divergence between permanent and temporary staff appointments continued at the start of the second quarter.

While permanent placements fell for the second time in three months, temp billings rose at the strongest rate since last November. Meanwhile, pay inflation continued to slow, reflecting an improvement in the availability of candidates.

Alan Nolan, director at KPMG commented: "These latest figures show clearly that employers are shifting away from hiring permanent staff into a more temporary workforce as a way of dealing with the current economic uncertainty and financial crisis. Cost reduction is very much on the agenda of employers not only through the reduction of headcount but also through ways of reducing tax and national insurance contributions. We see this trend most clearly in the financial services sector. On the other hand, in the medical, engineering and construction sector, demand for permanent staff is still strong because of the ongoing skills shortages in these areas."

Helen Reynolds (pic), acting CEO of the REC added: "This month's Report on Jobs shows that the labour market remains in a delicate state, although there remains a strong demand for temporary workers. This further highlights the crucial resource that agency work provides for employers, as well as the opportunities that it provides for workers. Within this context and in a period of economic instability, now is not the time to introduce legislation that could severely jeopardise the future of temporary work."

Source: rec-con.co.uk