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Rate of job growth has eased, says REC and KPMG report

Feb 09
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Rate of job growth has eased...

Last month, the number of permanent and temporary positions in the UK's job market increased, but the rate of growth slowed down, according to a new study.

The Report on Jobs - published by the Recruitment and Employment Confederation (REC) and KPMG - provides the most comprehensive data on Britain's labour market and draws on original survey information that comes directly from recruitment consultancies.

It reveals that in January, permanent staff placements continued to rise, but the rate of expansion dropped to a 20-month low. While temporary vacancies also increased, the pace of growth moderated slightly to the least marked since October 2014.

The data indicated that there was a bigger demand for staff last month, with the overall level of vacancies rising at the strongest rate for three months. In addition, sharper expansion for both permanent and temporary placements was recorded for January.

REC and KPMG's report also revealed that average starting salaries for people in permanent positions continued to rise at a marked pace in the first month of 2015, with the rate of growth rising to a four-month high. Pay for temporary staff also increased, but expansion dropped to its lowest in 11 months.

Staff shortages for permanent jobs worsened in January, with the rate of deterioration easing to its slowest for 12 months, while employee availability for temporary positions dropped to its weakest rate for 11 months.

There were regional discrepancies recorded on the new report, with the Midlands registering the fastest increase in permanent jobs, while the slowest rate was found to be in London.

Commenting on the data, Bernard Brown, partner and head of business services at KPMG, said: "They say good news comes in threes and it certainly seems to be the case for the UK economy. The past month has seen a rise in employment, a jump in the number of jobs being created and a growing number of firms prepared to pay more to land the best staff.

“However, the good news is only half the story. Starting salaries may be continuing to rise for the jobs being created today, but this is unsustainable over the long term."

He added that employers will soon reach a point where they cannot afford to offer candidates more money to take the position, no matter how in demand the person's skills are.

While Mr Brown believes this will be a problem in the future, he feels that potential employees in demand today might find it hard "to knock down doors tomorrow".

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