Report reveals record fall in demand for staff among UK employers

Employment figures in the UK are rapidly deteriorating, according to the latest monthly report on jobs published today by the Recruitment and Employment Confederation (REC) and accountant KPMG.

Overall demand for staff fell at the sharpest rate in the survey's 11-year history, with a marked decline in permanent and temporary appointments.

September data pointed to a drop in permanent job vacancies for the fifth straight month, with permanent appointments declining at the fastest pace since October 2001. Temporary availability meanwhile, increased at a survey-record pace.

Kevin Green, chief executive of the REC, said: “The rapidly worsening economic outlook is now really starting to bite in the jobs market with temporary and permanent appointments dropping rapidly.”

He said the REC is calling on the government to rethink putting VAT on staff hiring costs, which adds £400m to employer costs at a time when key sectors such as charity, financial and healthcare can least afford it.

Alan Nolan, director of KPMG, blamed the credit crunch for the deteriorating figures.

“The impact of the banking crisis has caused the UK jobs market to deteriorate in such a manner not seen since September 2001,” he said. “Employers are clearly feeling the effects, with redundancy programmes at the centre of all cost reduction strategies, and by refusing to invest in the skills available in an ever increasing labour pool.”