Professional recruitment firms reported that demand for permanent talent fell by 3% year-on-year in November 2018, while vacancies for contingent workers decreased by 5% over the same period, according to new survey data from the Association of Professional Staffing Companies (APSCo).
Contract vacancies up in financial services
Despite this overall decline in demand, APSCo’s data does reveal pockets of positivity, most notably within the financial services sector, where vacancies for contingent workers rose by 13%.
This boom in non-permanent appointments comes amid uncertainty around the UK’s future trading relationship with the EU, and as the Treasury Select Committee launches an inquiry into the future of the UK’s financial services post-Brexit.
Permanent placements up
Despite an overall dip in demand for talent, permanent placements increased by 3% in December 2018.
This overall strength can be firmly attributed to a significant 25% year-on-year increase in permanent placements within IT. However, when compared to November 2018, the number of permanent placements within the sector dipped by 5%, indicating that the flurry of hiring activity we have witnessed in the run up to IR35 roll-out in the private sector may now be slowing.
Contract market remains slow
While permanent placements increased 3% in the year to November 2018, the number of contractors out on assignment dipped by 6% during the same period. Use of contingent workers fell across every one of APSCo’s core sectors, with the exception of financial services where contractor levels increased by 10% year-on-year.
Professional salaries up
APSCo’s figures also reveal that median salaries across all professional sectors remained stable in December 2018, rising by 1.5% across the board. Average salaries within the majority of APSCo’s core sectors, however, increased more significantly. Within IT and financial services, for example, average salaries rose by 3.1% year-on-year. In engineering, meanwhile, salaries are up by 3.6% over the same period.
Ann Swain, Chief Executive of APSCo comments:
“With Philip Hammond warning that there will be significant disruption to the UK economy if Britain leaves the EU without a deal in March, it is unsurprising that an increasing number of businesses seem to be putting future plans to grow headcount on ice as Brexit uncertainty lingers.
“Meanwhile, growth in permanent placements – particularly within the IT sector – reflects a desire among employers to reduce reliance on contractors as changes to off-payroll working in the private sector draw closer.
“Financial services is one area where demand for contractors is booming as businesses – unwilling to grow permanent headcount until there is clarity on our future trading relationship with the EU – invest in interim talent to bridge the gap.”
John Nurthen, Staffing Industry Analysts’ Executive Director of Global Research commented:
“Recruitment activity at the end of 2018 paints a rather mixed picture but given the caution and uncertainty surrounding Brexit, it is perhaps surprising that we can clearly see a number of positive trends in the professional jobs market; a solid jump in salaries, higher permanent placements in IT and engineering and temp/contract placements up in finance and IT.”