The chief executive of Harvey Nash says the company has seen an improvement in trading conditions.

Speaking at the launch of latest CBI/Harvey Nash employment trends survey, Albert Ellis said there had been “a big surge in demand” for temporary staff.

And he struck an optimistic note about permanent recruitment, forecasting that as the economy improves HR departments will switch temporary and contract staff onto permanent contracts.  “We see this as a strong trend,” he said.

Ellis said he saw an increase in strategic hiring, with sales and business development jobs moving the market forward.  However, with chief financial officers “in charge at the moment” and cost reductions still very much in vogue, this had not yet spread to back office functions, in IT, accounting, and finance. 

Nigel Parslow, UK managing director at Harvey Nash, added financial services, professional services and technology had seen the most significant improvement in strategic hiring, but that other sectors, notably construction, remained weak.

Ellis predicted that the improvement would spread into other parts of the labour market, notably back office. “It won’t be long because employers will come up against capacity constraints, and so accounting and back office jobs will pick up,” he said.

However, Ellis warned that back office jobs would never reach the numbers of the past, citing Lloyds Banking Group, where many back office roles are among the 5,000 set to disappear following the bank’s merger HBOS.

John Cridland, deputy director general at the Confederation of British Industry (CBI), predicted that next year would see the same thing happening in the public sector, where shared back offices, for example, in hospital trusts would be introduced in an effort to protect frontline jobs.

Many of the results of the CBI/Harvey Nash survey entitled ‘Easing up?’ gave credence to Ellis’s views.

The survey found that the number of employers operating employment freezes fell sharply in the six months up to August/September. While more than a third (37% of employers surveyed) operated a recruitment freeze in August/September, this had fallen from 61% in the spring survey.

Much of the reduction is explained by the drop in the number of employers operating a freeze in parts of their organisation (from 31% to 10%).  However, the proportion of employers who applied a recruitment freeze right across their organisation declined by much less (from 30% to 27%).

However, the survey also found that employers hiring expectations were mixed.  Of those not operating a hiring freeze, only 27% said they expected to recruit more people than in 2008, whereas 42% said they expected the number of recruits to fall.  The remaining 31% anticipated that numbers recruited would remain much the same.