Businesses are taking on part-time staff at the fastest pace in three years, as owners look to meet rising demand for workers without shouldering the long-term costs of permanent hires.
The part-time hiring index rose to a three-year high of 52.7 in June, up from 52.2 in May and comfortably above the 50-point mark that separates growth from contraction.
This trend is driven by the need for extra hands in response to stronger economic activity, but SME owners are hesitant to lock in fixed payroll costs due to the uncertainty of growth.
According to recent data, the permanent hiring index jumped to 49.1 in June from 44.1 in May, although this still marks contraction and the measure has been below the 50 threshold for 45 consecutive months.
The pace of decline in permanent placements is easing, with the rate now similar to what was seen before the recent economic downturn.
Despite the backdrop of rising unemployment and the number of vacancies at a five-year low, candidate supply remains plentiful, with the index measuring full-time jobseekers dipping to 60.2 in June from 62.4.
Wage pressure has also plateaued, with workers receiving an average pay rise of 3.5 per cent in the three months to May, a figure that economists consider crucial in determining the Bank of England's interest rate decisions.
The data suggests a cautious optimism, with demand for staff returning but employers hiring with one hand on the exit, driven by the uncertainty of future growth.
