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Public sector spending cuts could scupper jobs market recovery, REC warns

The UK jobs market is showing signs of recovery from the pounding it took during the recession, but post-election public spending cuts could harm its prospects (external website). This according to latest monthly research from the Recruitment & Employment Confederation (REC) and consultants KPMG.

Positive findings from the survey include the following:

  • "The UK jobs market is continuing to improve", according to Recruitment & Employment Confederation (REC) chief executive Kevin Green.
  • Two-fifths (43%) of recruitment agencies saw permanent staff placements rise in February 2010 - the sharpest rise since July 2007, latest REC/KPMG data show.
  • One in 10 agencies (11.3%) said permanent salaries were higher than the previous month.
  • Vacancy numbers for both permanent and temporary staff showed strong growth.

But cuts to public spending - expected to follow some time after the 2010 general election, no matter which party wins - could jeopardise the tentative jobs market recovery. Kevin Green says: 

Looking ahead, there are indications that recruitment in the public sector could drop off fast. We question whether the public sector has the right capability in place to lead the necessary transformation and put in place staffing structures that will keep costs down while improving public services.

Last month, we reported that Keith Robinson of careersiteadvisor.com believes that public spending cuts will represent the single biggest force for change in recruitment over the coming years. He noted the very significant amount of business that third-party recruiters currently rely on from public sector hiring activity. He warned that these will inevitably fall victim to planned efficiency savings. Robinson said: "This is going to happen. This is going to be reality."

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