The latest REC/KPMG Report on Jobs paints a somewhat gloomier picture of the UK labour market than previously, with the rate of growth for both temporary/contracting roles and permanent vacancies slowing to a seven-month low.

Pay rates for permanent and temporary/contracting staff grew modestly in March, however, and the North, the Midlands and London all reported increased rates of temporary billings. Permanent vacancies rose most steeply in the North, the South and the Midlands, but fell slightly in London after two successive months of growth.

The general figures, however, conceal pockets of intense demand. Umbrella Company Employees specialising in IT and computing can rest assured that demand for their skills set was especially strong in March. Other skilled personnel were also in demand, including construction and engineering workers and nursing/medical/care workers, with the latter topping the poll in March for most sought-after temporary staff.

REC chief executive Kevin Green noted the emergence of a two-speed labour market, with persistently high levels of unemployment co-existing with intense demand for skilled workers. There are persistent shortages in IT and engineering skills which, he said, could impact disastrously on critical infrastructure projects.

Mr Green continued: “The government needs to build the talent pipeline for the future by increasing funding for apprenticeships in sectors where there is demand, refocusing the Work Program to train people who have potential but who lack the skills to fill current vacancies, and driving take-up for existing schemes like the Youth Contract.”

KPMG partner and head of business services, Bernard Brown, said: “Even amongst temporary placements, the rate of growth is at its weakest point for 7 months. It’s a sign that employers who were previously comfortable making short-term financial commitments are now nervous about undertaking any form of people investment.”

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