CURRENT NEWS
JUN
The industry has been responding to the latest ONS jobless figures.
Headline unemployment figure recorded a significant fall of 88,000 over the quarter to April, and unemployment still stands below the 2.5 million mark.
Total employment grew by 80,000 in the quarter to April, and the figures for public and private sector employment (which refer to March 2011), show that the growth in private sector employment (104,000) since December 2010 more than offset the decline in public sector employment (24,000), although the public sector figures for this period include significant numbers
of temporary jobs related to the Census.
Nigel Meager, Director of the Institute for Employment Studies, commented on the latest figures: “The next few months will be critical for the UK labour market. During this period the effects of public spending cuts will start to show up in a major way in the employment figures. Will the much- vaunted private sector recovery begin to generate jobs on a scale necessary to compensate for the cuts? Or are the cuts simply taking too much demand out of the economy too quickly and
threatening the already tentative recovery?
“On the basis of today’s figures, it would seem that the jury is still out. At first glance the latest data suggest relatively good news, with private sector jobs growth still outweighing public sector job loss.
It needs to be stressed, however, that the bulk of the employment impact of public sector cuts is yet to be felt: these data do not yet include the effect of the cuts taking place during the current financial year starting in April. The public sector figures are also still flattered somewhat by the inclusion of temporary Census jobs.
“Further, when we look at unemployment, the picture remains unclear, with a big reduction in the Labour Force Survey figure being set against an increase in the more recent claimant count data.
Other indicators of labour demand also reveal signs of underlying weakness, with reduced numbers of vacancies, and a surprising fall in the number of hours worked in the economy.
“The overall picture suggests a fragile, weak recovery in the labour market, which could easily be tipped into reverse, as the public sector job loss continues and intensifies.”
Steven Kirkpatrick, Managing Director, Adecco – the UK’s largest recruiter, said: "It is reassuring to see improvements to the jobs market in recent weeks. We have continued to see strong demand for temporary staff, and this is likely to continue throughout the summer. Temporary workers remain vital to many businesses and every business that is dependent on this resource should take the time to fully understand the implications of the new Agency Worker Regulations which will come into force in just over three months. Low confidence amongst employees has meant that many people are still reluctant to change jobs, but temporary workers should be reassured that there are jobs out there despite continued economic difficulties.”
Predicted job losses in the civil service have not materialised according to Manpower’s most positive report for three years.
The Manpower Employment Outlook Survey is based on responses from over 2,100 UK employers about hiring intentions in the coming quarter. The latest figure of plus three per cent indicates employers are intending to create additional jobs in the next quarter; this compares with a Net Employment Outlook of plus two per cent in Q2 2011.
Worryingly, however, hiring intentions among the UK’s largest businesses have fallen for the third
successive quarter and now remain flat “It seems when it comes to job vacancies, small is beautiful.” says Mark Cahill, UK Managing Director of Manpower.
“Candidates sometimes assume that bigger is better when it comes to employers, but these statistics clearly point to the opposite. SMEs were amongst the first to shed jobs during the recession, but we’re now seeing them build their workforce again and becoming an increasingly important source of job creation in the UK. The greatest unmet demand is for highly sought-after candidates in national skills shortage roles, such as engineers and IT specialists. Engineers have, it
seems, become the new plumbers!”
UK recruitment businesses may be affected by new measures imposed by the Saudi Arabian government to ensure greater employment of locals.
The country has imposed new quotas to encourage internal firms to employ local staff.
The programme, named Nitaqat, will determine whether companies are entitled to employ foreign workers based on their performance in abiding by the quotas. The firms failing to fulfill the requirements will face cuts in permits for foreign workers.
The kingdom is currently trying to deal with large-scale unemployment among its young population.
A recruitment expert has urged those in the staffing sector to use the resources they have to overcome the skills shortage
Chris Phillips, vice president, international marketing at Taleo has said that as the jobs market begins to show signs of improvement, we are likely to see the age old issues around skills shortages re-emerge, as the demand for new talent increases. However, instead of instantly looking outside of the organisation to bring in new talent, he would urge companies to first look inside their organisation, to ensure they are making the most of existing skill sets and employee career aspirations
He added: “While there will always be a need to recruit externally, an effective talent mobility strategy, which allows companies to mobilise people internally in response to business need makes great business sense and can prove both cost effective and highly motivating for internal staff.
“Our recent survey of HR decision makers supports this notion, with 71 per cent of respondents agreeing that it is important for companies to be able to proactively and strategically move people from role to role. However the challenge facing employers is whether they have the necessary ‘talent intelligence’ to enable them to accurately identify the various skill sets, which exist within their organisation. This is where having the right talent management technology in place can prove key, enabling managers to identify where the opportunities and gaps within their organisation lie and matching these with existing, internal skill sets.”
The chief executive of the REC, Kevin Green, has called the latest figures from his association’s Report on Jobs “worrying”.
The latest report has shown a weaker increase in both permanent placements and temp billings with growth of overall job vacancies easing to five-month low.
It has also pointed to the slowest rise in permanent staff salaries for three months.
Latest data has signalled an easing in growth of staff appointments during May while permanent placements and temp billings both rose at the weakest rates in seven months.
Recruitment consultants signalled a modest improvement in the availability of staff to fill job vacancies during May. However, the rates of growth of both permanent and temporary candidate availability eased since the previous month.
Green, pictured, said: “The latest data shows a worrying deceleration in the UK jobs market. Although the number of placements has continued to increase, the rate of expansion has hit a seven-month low. Private sector job creation has not hit the buffers but it is clearly slowing which heightens concerns over whether public sector job losses can be absorbed.
“There have been signs of increasing employer confidence in some sectors but economic growth remains too fragile to spark the real step-change that our jobs market needs. With consumer confidence at a low ebb, many individuals who would normally be looking to change jobs are staying put.
“The feedback from recruitment professionals confirms a real paradox in the current jobs market, namely, the ongoing challenge of finding suitable candidates in a number of sectors. With the Government’s much discussed ‘Work Programme’ formally getting underway this month, the question now is whether it will be able to deliver the training and guidance necessary to address the current disconnect between employer needs and available candidates. Looking ahead, the mismatch between vacancies and skills available could hinder future growth.”
Bernard Brown, partner and head of business services at KPMG added: “The latest figures are worrying – because they reveal a marked slowdown of the UK jobs market. We’ll need to see whether this is a trend or a blip. Employers across all sectors are becoming more cautious about hiring new staff.
“With businesses and consumers now being hit by higher taxes and fuel costs, public spending cuts and a continuing squeeze on real incomes – this is perhaps no surprise. The hope now is that growth in the UK will pick up later this year, led by a private sector recovery absorbing job losses in the public sector.”
06 Jun 2011 Accounting Shift - Attitude changing towards hourly rate from accountants.
Shifting attitudes of accountancy contractors has seen a preference returning to a higher hourly rate rather than long term contracts.
This is a sign that confidence is returning to the industry alongside a reduction in the percentage of long-term unemployment in the sector.
According to a new survey conducted by giant group plc, the contractor services provider, the proportion in the sector out of work for 90 days or more standing at just 8.1 per cent in Q1 2011, down half a percentage from Q1 2010.
The proportion of contractors who would prefer longer contracts over higher hourly pay has dropped from 63.3 per cent in Q1 2010 to 59.8 per cent in Q1 2011.
The shift towards higher hourly pay is evidence that contractors are becoming less concerned about being out of work for extended periods of time, explains giant.
Matthew Brown, managing director of giant, comments: “Finance departments were squeezed post credit-crunch and many remain understaffed. Organisations are slowly ramping up staffing levels and this is reflected in falling unemployment among accountancy contractors. The question is: what impact will the cull likely to hit public sector finance departments have on demand over the next year?”
“With the health of the economy still uncertain, employers remain reluctant to increase permanent headcounts, but there is now a need to kick-start projects that were stalled during the recession. This may lead to greater use of contractors in the medium term as employers respond to spikes in workload by making greater use of contingent staff.”
Chairman of the Freelancer and Contractor Services Association has urged recruiters to stick to the rules or suffer an AWR backlash.
FCSA chairman Stuart Davis, told his members of the options in light of the AWR guidance which was finalised last week: “The AWR legislation itself says more than the guidance published last month, and it is clear that there will, in broad terms, be three options for highly-skilled freelancers and contractors.
First, a compliant ‘Swedish Derogation’ approach, involving work via a company offering full employment and pay between assignments for the contractor. Second, work via a company offering a ‘match permanent pay’ model with full employment rights. Third, contractors may choose to work via their own limited company. Obviously, the ability for workers to be engaged and paid directly via a recruitment business will remain, subject to the recruitment business implementing either a compliant Swedish Derogation or match permanent pay approach.”
He added: “Proper compliance is achievable but it is going to involve difficult business decisions for some end clients, recruitment businesses and service providers alike – even FCSA members - and new commitments that some may not find palatable. But those ignoring the new legislation or seeking ‘clever’ evasion strategies are both likely to find themselves targeted strongly by the Department for Business, Innovation and Skills and trades unions, which will actively be looking to support members in bringing cases to tribunal. The key between success and failure will doubtless be to be prepared, and armed with the information needed to chart a compliant course.”