Despite flatlining economic growth, demand for Umbrella Company Employees held up remarkably well in December 2012, coming in just short of November’s performance.

This is the verdict of the latest REC/KPMG Report on Jobs, which shows permanent and temporary contractor appointments continued to grow last month, although at a slightly slower rate than in November. Vacancies for both staff categories rose strongly in private and public sectors to hit the highest point in 20 months, despite the easing in the rate of appointments.

Contractor availability remained as strong as it has been for the last 56 months, although there was a slight contraction in the availability of permanent candidates. Core contractor disciplines such as engineering and IT remained in high demand, coming in third and fifth respectively in the demand rankings, and even accounting and financial billings clambered up a notch in December to spend their second month on positive terrain.

Umbrella Companies supplying staff for executive/professional roles, however, saw a dip in demand during December, reflecting a yearlong trend of minuscule to zero growth.

Noting that permanent appointments had risen for three consecutive months and temporary/contractor appointments for five, REC chief executive Kevin Green said: “It’s another milestone for the UK labour market, which hasn’t seen a full quarter of simultaneous increases in both temp and permanent job placements since mid-2011. It’s also further confirmation of the continued strength of our flexible labour market in keeping people in employment.”

Mr Green predicted that skills shortages were likely to bedevil recruitment this year, with recruiters finding it harder to source candidates with key areas of expertise. They are already struggling to find IT contractor developers and engineers, he said.

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