Candidates are swamping the market as permanent and temporary placements contract at their fastest rate in the last 11 years, according to the Recruitment & Employment Confederation and KPMG ‘Report on Jobs’.

The study found 59% of recruiters surveyed have experienced a reduction in permanent placements between October and November, with the index reaching an all time low of 28.9 points (with 50 indicating no change).

Blue collar workers were the hardest hit, with demand for permanent placements falling to 27.9 index points in November.

However, demand for staff in the nursing, medical and care sector remained resilient, experiencing an 11.5% decrease in year-on-year demand — the lowest in any sector — with 54.5 index points in November.

Sue Guy, managing director of healthcare recruiter Medisoc, told Recruiter the sector had been preforming well, although she remained cautious. “We have had a good year; people will continue to be ill and so demand is not going to drop unless the government decides to change the funding.”

A decrease in the number of jobs has led to the fastest increase in the number of temporary staff on the market since the survey began, at 82.3 index points in November and 76.6 in October. Recruiters also reported an increase in the number of permanent candidates registering, at 80.1 index points in November, with respondents citing redundancies as the chief cause.

The unemployment rate mirrored the experience of recruiters, rising above 1.8m for the first time since the end of 1997 in the third quarter.

Faced with the deluge of applicants, recruiters are struggling to register the new candidates coming onto the marketplace (see Trends, page 20).

However, key skill shortages remain with recruiters reporting a dearth of CNC programmers, chefs and engineers. Rohit Kapoor, a consultant at IT and telecoms recruiter MSI, told Recruiter that CNC turners, programmers, operators and machinists are difficult to source: “They are harder to recruit and to track down. We have to rely on a strong database and networking within the industry.”

An increase in the number of permanent and temporary candidates in the marketplace has reduced candidates’ bargaining power, lowering salaries. Of the recruiters surveyed, 19% had noted a decline in permanent salaries between October and November and 22% noticed a decline in temporary pay. Figures from the Office for National Statistics showed overall earnings growth had slowed to 3.3% in the three months to September, the lowest since July 2003.

Commenting on the results, Mike Stevens, partner and head of business services at KPMG, said the speed of the decline in demand for placements had increased to a point where shortterm gains in the temporary market had been eclipsed in certain sectors.

“Contract and temporary staff provided flexibility, since current employment legislation means it will take some time for solvent businesses to make large numbers of permanent staff redundant,” he explained.

“It is already clear that this flexibility will be inadequate in the hardest hit areas of house building, motor retail and certain other retail areas involving larger items of discretionary spend.”