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Recruitment Watch - August 2012

Welcome to the latest edition of Mishcon de Reya's Recruitment Watch, prepared by the Firm's Recruitment Services Group.  Its aim is to provide those involved in the recruitment sector with a snapshot of what has been happening in the world of recruitment in the last month.

News

The City jobs cull has taken its toll on Michael Page, the white-collar hiring agency, with banking recruitment in the UK division down 50 per cent in the first six months of 2012 compared with the same period last year. Steve Ingham, Chief Executive, warned the next six months would continue to prove difficult. "The Eurozone uncertainty has impacted the confidence of clients who wish to hire and the confidence of those who want to switch jobs. Clearly that's impacting customer sentiment." Staff numbers in the group's UK and Europe offices fell but were offset by higher headcount in Asia and the Americas, pushing the overall figure 0.7 per cent higher to roughly 5,300.
Gill Plimmer and Mark Wembridge, The Financial Times, August 13 2012

The TUC has claimed young people finishing school, college or university this summer are facing the toughest outlook since 1994.

 The TUC analysis, which looks at both employment and education trends over the last 20 years, shows that the proportion of young people in full-time education has nearly doubled from 24 per cent in 1992 to 41% in 2012.

Despite this surge in education, the proportion of young people who are neither working nor studying full-time today remains close to record levels at 20.4%, the highest level since October 1994.

More than one in five (22%) 16-24 year olds are currently unemployed, significantly higher than in 1992 when the rate was 16 per cent.
David Woods, HR Magazine, 16 Aug 2012

Market

Fewer staff were appointed in July than the month before as companies became more cautious about hiring and many chose to postpone recruitment until after the Olympic Games, a survey said. Recruitment agencies reported a fall in permanent placements with the steepest decline in London, after disruption from the games made this summer an even quieter period than usual for job hunters. However, the rate of decline was slower than in June, which showed the biggest drop in hiring for three years. Hiring of temporary staff fell for the eighth month in a row but the decline also slowed from June.
Hannah Kuchler, The Financial Times, August 8 2012

Employers are increasingly using temps to fill professional jobs instead of taking on permanent workers, industry data suggests. Figures from the Association of Professional Staffing Companies, the trade group for professional recruitment companies, show temporary job placements in June were 7 per cent higher than the same month a year ago, while permanent job placements were 5 per cent lower.

Total employment has risen this year even though output has been falling, leaving economists puzzled, although much of the employment increase since job figures were at their worst has been in part-time work, temporary placements and self-employment.
Sarah O'Connor, The Financial Times, August 3 2012

The interim market is stabilising and is now firmly focused on growth, according to the latest survey by interim management provider Russam GMS. The twice-yearly benchmark survey of Russam's 12,000 interim managers charted a 5% growth in activity from January to June 2012, which follows a 6% decline in the previous six months. These figures follow a similar pattern of activity recorded in the previous year (in June 2011 there was a 1.2% increase in activity).
Recruiter, 31 July 2012

Trends/Practice

Corporate attitudes are hindering the use of the UK's temporary workforce. According to research from www.jobinasecond.com, the UK's SMS temporary jobs network there is a 'gravitas gap' which deters employers and employees from considering part-time and temporary career options. The website surveyed 100 companies from all sectors across the UK and the results indicated that despite some positive sentiments towards them, permanent staff are more likely to make negative assumptions and generalisations about their temping colleagues.

The results showed that a total of eight out of ten colleagues felt that temp and short-term work was suitable for their profession. Unfortunately, only 20 per cent of managers said they would choose a temporary candidate over a permanent one. Despite believing in short-term suitability for their professions, three-quarters of the permanent workforce surveyed said that they would not consider that sort of work themselves.
Global Recruiter, August 2012

Medium-sized firms are the most likely to bring in extra staff to cover the shortfall in resources when team members are on holiday, according to a survey from administrative staffing recruiter OfficeTeam. The survey of 200 UK HR directors found that overall, just 15% of firms take on extra staff, rising to 26% of medium-sized companies and dropping to 13% for small and 8% for large companies. Taking on temporary and contract workers was the fourth most common method of managing workloads during holiday periods, just behind putting projects on hold (17%), with the most common being delegating to other employees (70%) or to a manager (37%).

OfficeTeam Director Phil Booth says: “It would appear that extra workloads are more easily absorbed in small and large businesses, while medium-sized companies are more likely to bring in temporary or contract staff to relieve the pressure on their teams while ensuring business objectives are met.”
Recruiter, 16 Aug 2012

A third of employers are maintaining staff levels higher than they need in order to avoid losing skills, but will make redundancies if economic growth does not return soon, according to a CIPD report. The CIPD finds immediate jobs outlook remains positive, bolstered by employers who are holding on to staff to avoid losing skills despite low levels of demand. It's 'Labour Market Outlook' survey of more than 1000 employers, conducted by YouGov, found net employment balance, which measures the difference between the proportion of employers that intend to increase total staffing levels and those that intend to decrease total staffing levels in the third quarter of 2012, has remained positive at +5 (compared to +6 during the previous three months). The report also finds that optimism is higher among private sector SMEs (+46) than large private sector firms (+17), while the net score for the public sector remains negative (-36). But the precarious nature of the current market is highlighted by the finding that almost a third (31%) of private sector firms feel that they would be forced to cut back on labour if output or service delivery does not pick up in the next year. The report concludes that the recent trajectory of the jobs market, which has seen unemployment fall, may change course if economic growth does not pick up.
David Woods, HR Magazine, 13 August 2012

Mishcon de Reya

Mishcon de Reya's Recruitment Watch is published by the Firm's Recruitment Services Group, established to meet the demands of our clients within the recruitment sector. The cross departmental Group is made up of specialist lawyers who have extensive experience within the sector and a proven track record in being able to meet the growing demand for a one-stop service amongst their recruitment clients.