New survey data from the Association of Professional Recruitment Companies (APSCo) has revealed a 9% year-on-year rise in permanent placements for professional candidates in December 2017, while the use of contracting professionals eased.

APSCO’s data focuses on the professional recruitment sector and shows that vacancies for permanent staff climbed by 1% compared to December 2016.

Meanwhile, vacancies for contracting professionals declined by 8% over the same period, with the number of contractors actively engaged on assignments dipping by 15% year-on-year. According to APSCo, this is predominantly due to a 36% year-on-year downturn in the use of contracting IT professionals.

Each of the core sector groups monitored by APSCo registered a drop in demand for contractors.  Vacancies for contracting engineers fell modestly by 3%, but there were more substantial year-on-year declines in IT and Marketing (9% and 22% respectively).

The trends indicated by the data were reflected in the latest labour market figures from the Office for National Statistics (ONS), which similarly reported record high levels of permanent employment in January coupled with a downturn in the use of flexible workers.

Commenting on the APSCo figures, John Nurthen (Executive Director of Global Research at Staffing Industry Analysts, which compiled the data) said that it was not uncommon for hiring decisions to take longer in December because of end-of-year budgets. But recruiters were also reporting that employers were undoubtedly waiting to see what might happen in the economy before proceeding to make a firm job offer.

He emphasised two factors that he believed were certain to dominate the market in 2018 just as they had in 2017: Brexit uncertainties and skilled candidate shortages.

APSCo’s data showed that the strength of the permanent recruitment market in December was predominantly attributable to the financial services industry, where vacancies rose by 13% year-on-year and placements surged by 21%. Vacancies for contracting professionals in the sector, meanwhile, slipped by 3% year-on-year while those actively engaged on assignments dipped by 2% over the same interval.

APSCo CEO Ann Swain noted that the shift of emphasis from contract appointments to permanent hiring in financial services was most likely connected with renewed confidence in the sector after new forecasts indicated that Brexit will not affect the square mile as adversely as earlier fears had suggested.

However, commenting on the switch away from contract appointments as shown in the ONS figures, Julia Kermode, CEO of Umbrella Company trade association the Freelancer and Contractor Services Association (FCSA) said, “… if the UK’s post-Brexit plans do not provide sufficient clarity in the coming months, then it is likely there will be a further increase in temporary roles as businesses look to implement contingency plans.”

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