Posted on 21/02/2020 by Fuad Tamjeed
With the new IR35 legislation changes and improved market confidence, businesses are moving away from temporary candidates, leading to higher demand for permanent candidates which resulted in the strongest rise in permanent placements for over a year.
- Permanent placements rise for first time in a year
- Strongest temp billings growth in the Midlands for over a year
- Accounting / Finance vacancies increased at the quickest rate
- Overall staff vacancies rise at quickest pace since last March
Placement rates and staff demands
For the first time in a year, Permanent job roles increased at the end of 2019 and continued to rise in the beginning of 2020. The increase in permanent placements was widely linked to a rebound in market confidence which had led companies to push ahead with previously delayed recruitment plans. Temporary billings reduced for the first time in almost 7 years due to the upcoming IR35 reforms and a greater preference for permanent workers.
The quickest increase in vacancies for ten months was recorded in January. Permanent staff vacancies accelerated to the quickest since last March. In contrast, the increase in temporary vacancies remained among the weakest for 10 years.
The overall availability of candidates contracted at the end of 2019 and continued to sharply fall throughout January. Staff shortage was linked to lingering uncertainty around the outlook, fewer EU workers and a high employment rate. Temporary Staff availability declined at the quickest rate since last June.
Regional and sector distinctions in December 2019
Permanent staff appointments rose in London, the Midlands and the North of England, but declined further in the South of England. As for temporary staff appointments, regional data highlighted increases across all four monitored areas, with the Midlands seeing by far the steepest rate of growth.
The steepest increases in permanent vacancies were seen in Blue Collar and Engineering. In contrast, Retail registered a further marked fall in demand for permanent workers. Hotel & Catering topped the rankings in terms of temporary staff vacancies in December, followed by Blue Collar. The only sectors to record lower demand for short-term staff were IT & Computing, Retail and Executive & Professional.
Regional and sector distinctions in January 2020
Permanent staff appointments rose in the North and the South of England but falling in London and the Midlands. Whereas, both London and the South of England recorded lower temp billings during January after increases in December. However, growth was sustained in the Midlands and the North of England. All four monitored English regions saw marked falls in both permanent and temporary labour supply.
The quickest expansion in vacancies was seen in Accounting/ Financial, closely followed by Engineering. The majority of monitored job sectors noted greater demand for short-term workers in January, with the strongest increase seen in Engineering. Only two sectors recorded lower demand for temp workers, namely Retail and IT & Computing.
Recruitment & Employment Confederation chief executive Neil Carberry said:
“After the uncertainty of 2019, there are some signs of a clearer outlook for hiring in today’ survey. With a new government in place and the path ahead looking more predictable, some businesses have decided that they have waited long enough. The first increase in permanent placements for a year should give encouragement to both recruiters and employers – let’s hope this is a sign of positive things to come.
Feedback from recruiters shows that the upcoming IR35 changes are affecting both placements and the availability of flexible workers. This is a delicate period for the jobs market and is the worst time to push through sweeping changes to the way we tax contractors. It is right that government engages further with business on the changes, but they should also delay implementation until next year to allow time for a full, independent review and effective regulation of the umbrella sector. As it stands, the government risks damaging ethical businesses and encouraging non-compliance.”
Commenting on the latest survey results, James Stewart, Vice Chair at KPMG, said:
“It would appear that following the clarity of the election outcome, the jobs market finally began to show signs of life with permanent placements rising for the first time in a year.
However, growth was modest and coming off a historically low base, so UK business will be hoping for quick government action to get the UK back on the path to growth including an investment in upskilling the workforce. Lingering uncertainty around the Brexit deal to be secured will continue to weigh on employers’ decision making around hiring and investment over the coming months, as well as job-seekers desires to seek new opportunities.”
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