The KPMG/Recruitment & Employment Confederation report, released this morning, signalled the first rise in permanent staff appointments for a year, although growth was only modest. The increase was linked to higher business activity, the green light to previously delayed hiring plans and the upcoming IR35 legislation changes. Temp billings also rose slightly at the end of the year.

While growth in demand for staff improved marginally from November, the rate of expansion remained close to a decade-low and was modest overall. While permanent vacancies rose at the fastest pace for three months, growth in demand for temp workers softened since November.

While the rate of deterioration softened since November, candidate availability continued to decline sharply in December. Recruiters attributed lower candidate availability to lingering uncertainty and skill shortages. Permanent staff supply contracted at a quicker pace than that witnessed for short-term workers.

Across the country, permanent staff appointments rose in London, the Midlands and the North of England, but fell further in the South of England. Increases in temp billings were recorded across all four monitored areas, with the Midlands witnessing by far the steepest rate of growth.

Permanent vacancies increased in eight of the 10 sectors monitored by the survey in December, with the steepest increases seen in blue collar and engineering. However, retail registered a further marked fall in demand for permanent workers.

Hotel & catering topped the rankings for temporary staff vacancies in December, followed by blue collar, while the only sectors to record lower demand for short-term staff were IT & computing, retail and executive & professional.

Commenting on the findings, REC CEO Neil Carberry said: “After the uncertainty of 2019, there are some signs of a clearer outlook for hiring in today’s 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.”

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