Financial News

  • 9 October 2012, 0:52

Drop In Full-Time Jobs Amid Temps Boost

British businesses have reduced their planned staff hiring to the lowest level in 28 months, a new study suggests.

According to the latest BDO Business Trends report, the intention of firms to hire over the next six months dropped in September to the lowest level since May 2010.

The report said optimism in the business sector shows a continuation of the four-year "zigzag" pattern.

BDO partner Peter Hemington said: "With tough business conditions becoming further ingrained, there is of course no quick fix to the UK economy's ails.

"We would encourage the Government to take advantage of the Conservative Party conference to champion an innovative and flexible approach to strengthening the UK labour market, a key driver for economic recovery."

One option it has urged is for the coalition to consider implementation of shorter working weeks.

"Funding for vocational and training courses is vital, but the Government would also be wise to study measures being taken in countries like Germany and Austria where a policy of temporary shorter working times for full-time jobs, with reduced wages subsidised by the Government, has helped to reduce unemployment," Mr Hemington.

The drop in full-time hiring comes as another employment report indicates a rise in temporary positions.

The Recruitment and Employment Confederation (REC) and KPMG Report On Jobs found a growth in temp placements for the second month running, and it has now reached 14-month high.

The REC/KPMG study, undertaken by Markit Economics, used original survey data provided by recruitment consultancies and found a stabilisation in the permanent jobs market.

It revealed that the nursing, medical and care sector remains the most in-demand staffing sector.

It also found wage growth remains muted amid rising numbers of candidates being available.

KPMG head of business services Bernard Brown said: "It must be hugely encouraging for job seekers to see figures suggesting that demand for staff is on the increase..."

"Add to this news that permanent roles are stabilising and temporary positions have seen another month of growth and it would be easy to assume that the corner is being turned.

"However, the jobs market cannot be viewed in isolation as any sustainable improvement in employment remains dependent on the growth of the economy as a whole.

"Whilst some parts of the country may be showing signs of recovery, others are lagging behind and until an upward trajectory is seen across the whole of the UK, the jobs market will remain fragile with warnings to 'handle with care'."