* UK permanent hiring rising fastest since 2010-survey
* Recruiter Hays UK net fees up 10 pct
* Both see evidence of wage rises, market tightening
By Christine Murray and David Milliken
LONDON, Jan 9 Companies in Britain are hiring
permanent staff at the fastest rate in almost four years,
figures released on Thursday showed, increasing the chance that
unemployment will fall to the key 7 percent level sooner than
the Bank of England (BoE) expects.
The BoE committed in August to keep interest rates at a
record low of 0.5 percent at least until the jobless rate falls
to 7 percent, which it thought might take three years.
But unemployment has fallen much faster than the BoE
forecast, reaching 7.4 percent in the three months to October
and prompting the central bank to predict it could hit 7 percent
as early as the end of this year.
A survey by the Recruitment and Employment Confederation
(REC), which represents the staffing and recruitment industry,
showed employers are hiring permanent workers at their fastest
rate since March 2010, with wages rising and temporary hiring at
a 15-year record.
Strength in the labour market was confirmed by an update
from Britain's largest specialist recruiter Hays Plc,
showing net fees in the UK grew 10 percent in the three months
to end December.
Hays, whose main rivals include Michael Page and
Robert Walters and which places workers in areas such as
finance, IT and property, said permanent job placements grew
faster than temporary ones in the UK for the first time in six
years, driven by candidate confidence and increased hiring by
small and medium sized business.
"We're now seeing a real pick-up in people in work looking
to change jobs," Hays Finance Director Paul Venables said. "It's
a real sign that we've moved out of a fragile recovery into
something much more meaningful."
Walters had said on Wednesday its UK fees grew 18 percent,
buoyed by temporary and regional hiring.
LABOUR MARKET TIGHTENING
Trends in the REC survey do not match perfectly with those
in official unemployment data, as the figures do not directly
capture changes in the size of the workforce or jobs being cut.
They are also not representative of all employers.
But the REC data does suggest the labour market is
tightening, with the biggest decline in the availability of
permanent staff since November 2004.
"The real concern now is the mismatch between demand and
supply, with recruiters reporting that they can't source
suitable candidates for vacancies," Kate Shoesmith, REC's
director of policy, said, citing shortages of accountants and
Venables said he had seen some tightening in UK construction
and property, where Hays' fees rose 21 percent in the second
quarter, originally just in housebuilding but increasingly
across commercial construction.
"We saw a big uplift in retail development (and) quite a big
uplift in some infrastructure projects coming online," Venables
said. "We've hired for our clients more architects in the last
six months than in the previous four years."
Venables noted a tighter labour market is "fabulous" for
recruitment companies as it leads to wage inflation and creates
demand for them to use their skills to seek out new candidates.
He said he had started to see wage inflation in the last two
quarters, with existing employees getting pay rises of between 2
and 3 percent and those that move jobs getting salary increases
of more than 10 percent.
The REC survey also showed the biggest rise in starting
salaries since October 2007, welcome news to many Britons whose
wages rose by less than half the rate of inflation last year.
But this is likely to be of more concern to the Bank of
England. Seven percent unemployment is not an automatic trigger
for a rate rise, but one of several factors for considering one
is whether wage rises are creating inflation pressures.