Jobs outlook gloomy, and worse to come: KPMG
5 Nov 08
October’s Report on Jobs, from the Recruitment and Employment Confederation and KPMG, signalled a continuation of the recent rapid weakening of the UK labour market
Permanent and temporary staff appointments fell at survey-record rates as demand for staff contracted sharply. Wages and salaries declined for the first time in over five years, pressured by rapidly rising levels of candidate availability.
The Report on Jobs, published by the Recruitment and Employment Confederation and KPMG, provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies.
Craig Anderson, head of KPMG in Scotland said: "This latest survey reveals a gloomy picture of the UK labour market. The terrible news from the equity markets and the broader economic front have led to a steep fall in the demand for permanent and temporary jobs across most sectors of the economy and the worst is probably yet to come.
“As UK companies are increasingly under pressure and economic conditions are getting worse, many employers won't have any choice than making large-scale redundancies. Job losses will most likely affect all sectors across the economy with only a few exceptions.
“Support services companies for example could be relatively protected as they provide essential but modest value services to the corporate and public sectors; even they however are feeling the squeeze and their margins are often too thin to absorb any level of corporate failure in their customer base."
Kevin Green, Chief Executive, Recruitment and Employment Confederation (REC) said: "These are the worst figures we have seen since the report began in 1997 with both vacancies and the number of job placements falling at an increasing rate.
"The REC is calling on the Government not to remove the VAT concession in April and push back the deployment of the Agency Workers Directive until the economy has started to recover.
"The Prime Minister recently said that the flexible labour market is the best way for us to protect jobs and so we expect the Government not to add to employers' costs when taking on temporary workers.
"Although businesses are clearly recruiting less, it is vital that they do continue to use agencies to provide them with the right staff in order to remain competitive. The fast and effective sourcing of candidates will also be crucial when the economy starts to pick up again and will enable businesses to seize new opportunities.
"Our advice to jobseekers in this increasingly competitive labour market is to build links with recruitment agencies that can provide the latest guidance on available jobs and to be more flexible in terms of the types of jobs they're willing to take. In addition, jobseekers should look into the opportunities linked to temporary, contract and interim management jobs which can provide a useful short term outlet."
Plunge in staff appointments...
Permanent placements and temporary/contract staff billings fell sharply in October, with the respective rates of decline accelerating to series-records. Consultants frequently reported that business confidence had taken a hit from weakening economic conditions and financial market turmoil, leading to a marked drop in recruitment activity.
...as vacancies fell rapidly
Demand for staff contracted at the fastest pace in the survey history in October, with both permanent and temporary vacancies falling substantially on the month. Nursing/Medical/Care was the only staff category to escape the downturn.
Record rise in candidate availability...
The availability of candidates to fill vacancies continued to surge, driven by fewer job opportunities and, in many cases, redundancies. Panellists noted widespread improvements in the supply of staff for both permanent and short-term positions.
...placed downward pressure on employee pay
October data signalled outright reductions in pay rates for the first time in over five years, as the rapid weakening of labour market conditions shifted the balance of power in salary negotiations to employers. This more than offset the inflationary impact on the lower end of the job market resulting from the latest increase in the national minimum wage.