Recruitment agencies seeing reduced demand for staff

Recruiters are reporting reduced demand for new staff as employers remain “cautious” about the economy.

Research by the Recruitment and Employment Confederation (REC) and KPMG found that permanent and temporary placements by recruitment agencies have fallen.

The number of job vacancies has decreased for 10 consecutive months, while the number of available candidates has risen, according to a survey of 400 recruiters.

REC chief executive Neil Carberry said: “August is always a difficult market to judge because of the summer break, but this month’s survey supports what we have been hearing around the country – employers are still cautious.

“They are waiting for a clear signal that sustained demand is around the corner. The new Government said growth was its main priority, but it needs to deliver now.

“A vision for a positive, prosperous Britain has to accompany the fiscal realism that is being served up right now. That is the test for the Chancellor and Prime Minister this autumn.”

Jon Holt, of KPMG, said: “Recent Government warnings that the UK’s economy may weaken further before improving add to the overall sense of uncertainty, affecting recruitment plans.

“Firms holding back from hiring led to a sharp contraction in the number of people placed into permanent roles in August amid continued decline in demand, extending the downturn in the UK’s labour market.”