6th Nov 2009
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Recruitment and Economic Review

In a week when the Bank of England decided to pump another £25 billion into the ailing UK economy through its quantitative easing programme, there was still no clear view of recovery in the recruitment market, with equal measures of good and bad news from the financial recruitment sector.

The Higher Education Careers Services Unit (HECSU) released a report this week - What Do Graduates Do? - which revealed that the rate of unemployment amongst graduates had risen to 7.9%, the highest rate for 12 years. The number of graduates working in business or finance has dropped, as is the case in most sectors. Despite this bad news, Mike Hill, HECSU's Chief Executive, advised "graduates shouldn't feel disheartened, many organisations continue to recruit and a degree will certainly remain valuable for many years to come."

The latest Recruitment and Employment Confederation (REC) and KPMG Report on Jobs has highlighted growth in permanent placements and temporary billings for the third consecutive month, alongside a continued increase in candidate availability. The REC's Chief Executive, Kevin Green commented that "...these figures show that the UK jobs market is on the road to recovery, with signs of improvement for the third month in a row. The demand for permanent recruitment is returning as employers start to hire people at an accelerating rate." A second REC survey, the Recruitment Industry Trends Survey, painted a less promising picture in its review of the past year, which has seen recruitment industry turnover drop from its 2008 record of £27bn to £22.491bn, a 16.8% fall. Both permanent and temporary turnover have dropped, while temporary staffing dominates the recruitment sector, accounting for 88.4% of the market. Financial jobseekers may be heartened to read that accounting and finance represents the largest share of permanent recruitment placements, at 22%, with a similar figure (20%) of temporary placements also coming from this sector.

The latest CIPS-Markit Index which surveys growth in the services sector reported in October that the sector recorded its strongest growth for two years. Despite this, confidence in the sector has dropped from September, with the report citing concerns over price cutting and the possibility of heavy public sector cuts as possible reasons for this drop in confidence.

Personnel Today this week reported on warnings from Unite that the government's plans to break up and sell off parts of high street banks Lloyds TSB and Royal Bank of Scotland could result in as many as 25,000 jobs. This warning was given additional weight by RBS's earlier announcement that it was cutting 3,700 jobs from its UK branches.

Finally this week saw the release of our own Quarterly Survey of financial recruitment agency clients, who largely responded in a cautiously optimistic manner when asked about their experiences of financial recruitment in the third quarter of 2009. The general consensus amongst those who completed the survey was that the numbers of financial vacancies had increased in the final month of the third quarter and would continue to grow as we move towards the end of the year. It would also appear that jobseekers are also more confident about the state of the economy and of their prospects as the number of already employed candidates who are looking to move to a new position is increasing steadily. Those who replied to the survey felt that we have seen the worst of the recession and 2010 should see a slow and protracted recovery.

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