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Wages in decline and job vacancies falling sharply

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Job vacancies are falling at a record rate, a new report has found.

According to the Recruitment and Employment Confederation (REC), its Jobs Vacancies Index slipped to 27.6 in February, the lowest point since the REC began its monthly survey 12 years go.

Also on the way down are wages, depressed by weak demand for new staff and the availability of a growing pool of out-of-work candidates.

One contributory factor to the fall in wages has been the policy of some employers to release older and more expensive employees in favour of taking on younger recruits on lower salaries.

In February, some 28 per cent of employers reported that they had filled posts with staff on earnings lower than those paid employees who held the same position before. In September the proportion was only 7.7 per cent.

Pay rates for temporary workers also slid for the fifth month in a row and are now declining at the fastest rate since 1997.

Kevin Green, the chief executive of the REC, said: “It is clear that we have not yet hit the bottom of the jobs market with demand for staff continuing to contract. Every job must be seen as an opportunity to keep people in work, including temporary, interim and contract positions.”

Mr Green argued that everything should be done to provide employers with positive reasons for keeping staff on and jobs available.

He said: “It is essential that we avoid any additional regulation that would simply act as a disincentive for employers to offer these kind of flexible working arrangements to job-seekers at such a crucial time. Although demand for temporary staff is down and despite recent high-profile examples of assignments being terminated, there are still over a million temporary and interim assignments available every week.”