Round-up of the weekPosted on 9th October 2015
Permanent and temporary staff placements continue to rise
The number of placements in permanent and temporary job roles has gone up once again, according to new figures.
Research by the Recruitment and Employment Confederation (REC) and KPMG indicated increases in both segments of the job market during September.
However, the report pointed out that the level of growth is moderating, along with increases in salaries.
This could be partly linked to the drop in candidate availability, as the REC and KPMG said employers were finding it harder to fill both permanent and temporary jobs.
Kevin Green, chief executive of the REC, also noted that hiring decisions are being affected by the planned introduction of the National Living Wage.
He stated that in some sectors, it is causing businesses to "consider alternatives to hiring more staff and this could lead to greater automation in some sectors".
"This might have a positive impact on UK productivity, but it could also put the brakes on employment growth," he commented.
Mr Green called on the government to acknowledge these issues and step up its focus and skills and progression to "create a better supply of talented candidates in the long-term".
Interest rates remain on hold
The Bank of England's Monetary Policy Committee (MPC) has opted to keep interest rates at their record low of 0.5 per cent.
Interest rates have been fixed at this level since March 2009, although improving economic conditions have led to widespread speculation that the MPC will put them up slightly.
The British Chambers of Commerce believes it has made the right call in maintaining rates, particularly as inflation is likely to remain below the official two per cent target for some time.
David Kern, chief economist at the body, commented: "The UK recovery, although on course, is still fragile - it remains too reliant on consumer spending and is facing headwinds. Many major economies are experiencing difficulties that will inevitably increase the challenges for our exporters."
He stated that in light of this "unsettled background", it is important not to take any steps that could jeopardise the recovery, as low and stable interest rates over a prolonged period can help businesses and therefore help the economy gain momentum.
IoD calls for focus on business agility
Policymakers have been urged to focus more heavily on business agility in order to encourage the spread of new ideas and approaches throughout the economy.
According to the Institute of Directors (IoD), they are not looking at the "productivity puzzle" in the right way, as they are concentrating too much on output per hour.
The IoD believes this could be dangerous, as it means attention is not being paid to factors such as how firms can respond speedily, efficiently and effectively to the ever-changing operating environment and consumers demands.
James Sproule, chief economist at the IoD, said: "In pursuing the nirvana of steadily-rising productivity, one has to bear in mind how our economy is changing, how people choose to work, and what future economic success will look like. We need to ask if too close a focus on productivity numbers without considering wider factors could pose a long-term risk to the economy and prosperity."
Politicians and businesses alike have therefore been urged to do more to tackle skill shortages in key areas, as well as protect the UK's flexible labour market.
The IoD added that the policy environment and regulatory infrastructure must support entrepreneurialism and innovation, as well as make sure new technologies and business practices are spread throughout the economy as quickly as possible.