UK employers still hiring new staff but remain cautious, surveys show

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Firms in the UK are continuing to recruit new staff but at a slower rate than before, according to two surveys released today.

Recruitment consultancies reported another modest rise in permanent staff placements during May, but the rate of growth was the weakest seen for the last five months, indicating that employers are becoming more cautious about hiring in light of ongoing uncertainty about the UK economy and the eurozone crisis.

Moreover, temporary/contract staff billings continued to fall, declining for the sixth month running, and at the fastest pace since July 2009.

The Recruitment and Employment Confederation (REC) and KPMG Report on Jobs, which is compiled from data provided by 400 UK recruitment and employment consultancies, also reveals that overall demand for staff rose at the slowest rate in four months during May, with weaker increases in vacancies for both permanent and temporary/contract workers.

Demand for staff last month was reported to have risen at the fastest rates for IT, engineering and construction workers.

The continuing upward trend in recruitment, albeit at a slower pace, is confirmed in a new survey from Manpower UK, which shows that a balance of +1% of employers are planning to hire staff in the third quarter. This shows that the jobs market is still in positive territory, but is down from the outlook of +2% which was recorded for the second quarter.

Manpower said that employers were showing a “remarkable resilience” given the state of the economy and the company highlighted finance & business services and utilities as the sectors where hiring is particularly strong at the moment.

According to KPMG partner and head of Business Services, Bernard Brown, 8.4 million more hours were worked per week in the first quarter of 2012, compared to the previous three months, but he questioned how much impact this is having on expanding the UK economy.

“Judging by recent economic output data, there is a concern that we are simply working harder – but not necessarily smarter – and that real productivity growth still remains elusive,” Brown added.

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