While UK unemployment has fallen, caution remains among candidates and employers alike.

Figures from the Office for National Statistics reveal that the number of people unemployed in the UK fell by 49,000 to 2.46m in the quarter to June, marking the second consecutive month that unemployment has fallen, and the biggest drop since 2007.

Despite the positive figures, a spokesperson at Hays told Recruiterthat there is still a lack of confidence from both candidates and clients. “Currently, there is a focus on public sector job cuts and concern over whether the private sector is going to be able to provide sufficient jobs to counteract redundancies.

“Throughout the recession specialist skills have remained in demand and this is continuing. Certain areas such as IT, pharma and senior finance continue to provide significant opportunities for candidates.

“Increasingly, there is also recruitment activity within the City as the majority of investment, corporate and retail banks continue to rebuild their businesses. Specifically, we are seeing a demand for permanent and interim candidates who have previously worked within financial markets.”

Dan Watkins, director of find-a-solicitor service, Contact Law, reports that there has been a significant rise in the number of people ringing in for legal advice on employment-related issues, particular those who have recently been made redundant or are about to lose their jobs.

“In the past month alone, employment-related enquiries have increased by 15%, the majority of which are coming from people working in the public sector. We expect the number of employment-related enquiries to rise considerably in the next six to 12 months as public sector cuts start to be implemented.”

David Kern, chief economist at the British Chambers of Commerce (BCC), says that while the figures are better-than-expected, they mask worrying trends. “Employment is higher while unemployment and inactivity are both lower. However, the number of part-time workers rose to its highest level since records began, and the number of people unemployed for more than 12 months increased to a level not seen since 1997.”
 
According to purchaser of temporary agency labour de Poel, the use of temporary agency labour rose in July across all industry sectors by 2.8% compared with a universal decrease in the previous month of 13%.

Chief executive Matthew Sanders adds: “The findings suggest organisations are expanding their workforces to accommodate increased business activity, but are seeking an alternative to permanent recruitment and ‘safe ways’ of responding to market growth while the economy remains unstable.

However, the banking sector is one sector that does not currently appear to share such caution, according to Guy Emmerson, associate director of Badenoch & Clark’s Banking & Financial Services division.

“The first half of 2010 has seen a substantial increase in permanent positions in investment management. Distribution is currently a key area with a huge increase in request for proposal roles, as well as investment writing roles.

“As hedge fund business returns, we are seeing more vacancies for professionals with experience in stock lending as banks feel more confident in issuing stock and there is a greater requirement for equity financing.

“Compliance roles continue to come onto the market, with far more opportunities in investment banking for control room officers at all levels, compliance monitoring, portfolio guideline monitoring and surveillance.”