By Daniel Hunter

The Recruitment and Employment Confederation (REC) and KPMG Report on Jobs has revealed that temporary billings growth is at a 15-year high.

Agencies’ billings from the employment of temporary/contract staff increased strongly in August, with the rate of expansion picking up to the fastest since July 1998. Higher temp billings were supported by the sharpest rise in demand for short- term workers since December 2000.

The number of staff placed in permanent roles continued to increase at a marked pace in August, although growth eased from July’s 40-month high. Underpinning the rise was the fastest increase in available permanent vacancies since June 2007.

The rate of inflation of permanent staff salaries accelerated in August, reaching its fastest pace in five-and-a-half years. Temp pay rates also continued to rise, although the pace of inflation was slightly slower than the five-and-a-half year high seen in July.

The availability of staff to fill permanent job vacancies continued to decline in August, extending the current sequence to four months. The latest fall was solid, albeit slightly weaker than in July. Reflecting the strong trend in temp hiring, the availability of short-term workers deteriorated at the sharpest rate in six years.

All four English regions saw increased numbers of permanent staff placements during the latest survey period. The sharpest rise was signalled in the North, while the slowest growth was registered in London.

Higher temp billings were registered in all four English regions during the latest survey period, led by the North.

The private sector continued to register a much stronger trend in demand for staff than the public sector during August. Marked rates of expansion were indicated for both permanent and temporary workers in the private sector.

In the public sector, demand for permanent staff fell for a second consecutive month, while demand for temporary staff was moderately higher.

Growth of demand was signalled for all nine types of permanent staff monitored by the survey in August. The strongest rate of expansion was indicated for Engineering workers, while Hotel & Catering employees saw the slowest rise in vacancies.

Increased vacancy levels were broad-based across all nine temporary/contract staff sectors during the latest survey period. The sharpest rise in demand was signalled for Engineering workers.

“August was an extraordinary month for the UK jobs market, with temp placements growth hitting a 15 year high. Our temporary worker index is the highest we have seen since 1998, the same summer Google was founded and France won the World Cup for the first time," REC chief executive Kevin Green said.

"There is more good news for all workers with pay rates for temps rising for the seventh consecutive month and starting salaries for permanent staff increasing at the highest rate in five and a half years.

“Vacancy growth has hit a six year high and fluidity is returning to the jobs market, so over the coming months we expect to see a noticeable improvement in official employment figures. The major issue now is the worrying lack of candidates to fill the jobs being advertised. In August, the number of vacancies increased at the sharpest rate in over six years but the availability of staff keeps declining.

“This month‟s figures should be celebrated and efforts should be focused on addressing the skills gap rather than picking holes in flexible working.”

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