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What’s Causing The Slowdown In Permanent Placements?

Published: Friday 10th July 2015

A blank jigsaw puzzle, with a man holding a jigsaw ith 'temporary' on it, to place on 'permanent'

There has been a marked slowdown in the pace of permanent staff placements made by recruitment agencies throughout the country, it has emerged.

In June, such placements rose at their slowest pace for two years and the slowdown was blamed on a lack of skilled candidates, according to the Recruitment and Employment Confederation (REC).

This means that candidates armed with the desired skills can take their pick from the job boards and may even discard their job search and opt for temporary contract work, which can offer more flexibility and often higher pay than permanent roles.

Earlier in the year it was reported that the skills shortage was hampering productivity and holding back Britain’s economic recovery. And in last week’s Budget, the country’s productivity rate, which is lower than similar-sized European countries, was targeted by the Chancellor George Osborne.

The UK is lacking skilled workers in the fields of science, technology, engineering and maths, so-called Stem skills. The shortage is particularly acute in the construction industry where house building targets look set to be affected. The Confederation of British Industry (CBI) says nearly 40% of firms looking for candidates with these Stem skills have had difficulty recruiting and about half of them predicted that the situation would get worse.

The UK Commission for Employment and Skills wants industry to take a lead on tackling the skills shortage. It has called for employers to take a lead in developing skills, more vocational pathways to work and more apprenticeships, more integration between education and the world of work, and improved work experience for school pupils.

The REC survey, which was commissioned in partnership with accountants KPMG, also said that salaries for permanent hires remained above the historical trend but growth had slowed.

Bernard Brown, a partner at KPMG said: “Recruiters are struggling to fill vacancies for everything from software engineers to sales.”


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