Perm-to-Temp! A Blip, or a trend?

The latest UK Report on Jobs from RBS for August 2019 shows a second month of decline in permanent placements in Scotland with the 'Permanent Placement Index' slipping further below the median level of 50, to only 48.8.   While vacancy levels continued to grow, although more slowly than previous months, the apparent trend shows employers turning to short-term staff to fulfill current vacancies.

Whilst temporary vacancy growth quickened from July, growth in permanent vacancies eased to the lowest seen in over three-and-a-half-years.  Poor candidate availability also continued the pressure on pay as average rates continued to rise.

As a result, while perm fee levels dipped, temporary staff billings rose across Scotland, with the increase accelerating to the quickest since March.  Overall, the rise was strong with temp billing growth in Scotland markedly outperforming that for the UK as a whole.

The changing pattern in Scotland was mirrored at the UK level, albeit with Scotland reporting stronger growth. Weaker growth in demand for permanent staff was in contrast to temporary vacancies, which increased at the fastest pace for ten months. Trends between Scotland and the UK as a whole diverged, however, with the latter observing the softest rise in temporary job openings since September 2009. 

With all the confusion around Brexit and, now an impending likely general election, is this a blip or a longer-term emerging trend?  Only time can tell, but there's no doubt the fittest recruitment businesses who are focused on attracting and retaining the best talent in their own organisation, will be best place to continue to prosper.