| Salary growth continues to slow |
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| Wednesday, 09 April 2008 | |
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March saw a modest rise in permanent staff appointments following February’s slight decline.
March’s Report on Jobs, from the Recruitment and Employment Confederation and KPMG, shows that salary inflation eased to a two-and-a-half year low, reflecting weaker growth of demand for staff and easing skill shortages. Brisk growth of temporary staff appointments suggested that employers continued to favour flexible workforces. The Report on Jobs, published by the Recruitment & Employment Confederation and KPMG, provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies and employers. Alan Nolan, director at KPMG, says that the banking crisis is clearly taking its toll as the financial sector as well as IT and computing are among the sectors where demand for both permanent and temporary staff is weakest. Fears are growing that jitters in the City will have a knock-on effect on other sectors. Although demand for staff in the engineering and construction sector is still strong, major contractors now worry that the turmoil in the financial markets will result in major office developments becoming casualties of the credit crunch. Nolan warns employers in all sectors are becoming increasingly cautious about the outlook. “Demand for staff is slowing and employers are hedging their bets with more emphasis on temporary hires, while pay pressures are easing somewhat. This further evidence of a softening labour market is a green light for an interest rate cut this week,” he says. Helen Reynolds, acting chief executive officer at the Recruitment & Employment Confederation (REC) explains that the modest rebound in permanent placements suggests that the labour market appears to be holding up. Employers are dealing with the economic uncertainty by keeping close check of salaries, as indicated by permanent staff wage inflation coming in at a two-and-a-half-year low. Currently the worst effects on the jobs market are being felt in the City, as banks retrench but demand in other industry sectors such as engineering and construction shows no sign of slowing. “This suggests to us that job losses on the scale of the dotcom crash in 2001 are far from likely,” Reynolds concludes Related articles
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