A recruitment industry body has warned that an incoming government of whatever stripe must address two immediate priorities – stimulating jobs growth and cutting expenditure without creating a public sector recession by shedding thousands of posts.
The warning came as research indicated that the rate at which recruiters filled permanent vacancies slipped last month from March’s 12 year high as the public sector appeared poised to rein in hiring.
The Recruitment and Employment Confederation (REC) said its permanent placements index fell to 63.2 in April from 65.2 the previous month – the index’s highest level since October 1997. Billings for temporary work also edged down to 59.8 from 60.9 in March, but both figures were comfortably above the 50 contraction/expansion level, marking the ninth consecutive monthly expansion in both kinds of job market.
The figures echoed official ones published by the Office of National Statistics, which indicated sharp drops in the number of unemployment benefit claimants in February and March.
But Kevin Green, REC’s chief executive, said that the first test of any new administration would be to nurture the slowly improving but fragile jobs market.
“Private sector employers have used short-term work, sabbaticals and pay freezes as a means of reducing costs whilst retaining high-performing staff. Innovative resourcing strategies will be equally crucial within the public sector,” he added.
Management consultancy KPMG, which sponsored the survey undertaken among 400 recruitment firms, also warned that public sector jobs cuts could cause overall job growth to level off – regardless of the result in tomorrow’s general election.
Bernard Brown, the firm’s head of business services, said: “It is now becoming increasingly clear that the long-predicted public sector recession has started to hit the jobs market and therefore the upwards trend we have seen over the last couple of months may come to a halt.”
The study also indicated that pay growth was picking up across both the permanent and temporary sectors, however. The permanent salaries index rose to 55.2 in April from 53.5 in March, representing the fastest wage inflation since March 2008. The temporary and contract pay index rose to 53.1 in April from 53.6 in March, the fastest growth for a little over two years.
