Temporary billings rose at the fastest rate for over two years in December, according to the latest survey of recruitment consultancies by the Recruitment and Employment Confederation and KPMG.
This month’s Report On Jobs, complied from data collected between December 4 and December 17, showed that both temporary billings and vacancies expanded significantly as companies opted to take on short-term staff due to lingering uncertainty caused by both the covid-19 pandemic and Brexit. Demand for IT contractors saw a rise from 52.6 to 55.2.
Permanent placements also rose for the first time since September, although the increase was only slight. Recruiters indicated that the upturn was driven by increased market activity and greater confidence, partly due to recent vaccine news.
Nonetheless, lingering uncertainty over the COVID-19 pandemic and Brexit led to the strongest increase in temp billings for over two years as companies opted to take on short-term workers.
The sharpest increase in temporary vacancies for over eighteen months also drove an increase in total demand for workers, the first such increase since September, although as demand for permanent staff only rose marginally, the overall effect on total worker demand was a very slight increase compared to the previous month.
The recruitment consultancies polled also 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, although permanent pay rose only fractionally and the upturn in temp wages was mild overall.
Redundancies related to the pandemic and fears over current job security also led to a further marked increase in both permanent and temporary candidates, although the increase in availability was the softest recorded since April.
On a regional level, of the four monitored regions in England, only London saw declines in both permanent placements and temp billings. The South, Midlands and North all saw increases.
Half of the ten 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. Hotel/Catering meanwhile 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, with most hospitality businesses forced to either close or provide a take-away only service over the course of the month.
“The underlying strength of the British economy shone through in the December jobs figures,” said Neil Carberry, chief executive of the REC. “The biggest expansion in temporary recruitment since October 2018 shows how important the flexible jobs market is to that performance. Growing permanent placements and starting pay also emphasised the resilience of our economy.
“The important thing now is to maintain as much of that momentum as possible through the new lockdown. With business cashflows under renewed pressure, helping employers protect and create jobs is essential. 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.
“Regions have been recovering at different speeds and London continues to lag behind. London is home to some of the most deprived boroughs in the country, so this is particularly worrying. It underlines the urgency of action needed to help businesses retain workers and get the vaccine delivered.”
“The emergence of a vaccine did bring more confidence to the jobs market in December with a small increase in permanent appointments,” said James Stewart, vice chair at KPMG. “Temporary billings were also sharply up across the UK although London was a notable exception.
“However, we will have to see what January brings with a new national lockdown sure to fuel 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.”
Both perm and contract agencies reported a scarcity of candidates skilled in Analysis, Automation Testing, BI, Cyber, C#, Data Science, Development, IT/Technology, Maximo, SAP and Software.
Permanent vacancies that recruiters struggled to fill included Agile, Project Management, Cyber Security, CNC, Cloud Engineering, Data and Digital. December also saw a scarcity of Database Developers for contract roles.
The report is compiled by IHS Markit from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.
11th January 2021.