Leading recruitment indexes has shown that the rate at which vacancies - both permanent and temporary - are filled, eased in December despite continuing strong demand for new staff.
The permanent placements index compiled by the Recruitment and Employment Confederation, (REC) fell to 54.9 in December, from its November figure of 55.2. The index of temporary staffing appointments fell to 52.8 to 53.5.
While index levels over 50 indicate net hiring among the panel of 400 recruitment companies polled, REC chief executive, Kevin Green, said that the figures could mark the beginning of a widely expected period of caution among firms when it comes to hiring and new recruitment.
He added that firms are mustering for a 2011 of slow economic growth and the knock-on effects of tax rises and spending cuts.
"While these figures continued to show private sector employment doing well, the next few months will be very tough for the jobs market in the UK," he said in a statement.
However Geoff Newman from online recruitment company, Recruitment Genius rejected the fall in demand saying "These figures reflects a drop in demand for recruitment agencies, which is hardly surprising as they charge an average fee of £4,138. However our service which helped over fill over 38,000 jobs in 2010 for £199 or less has enjoyed staggering demand. I can only assume this is employers voting with their feet and using cheaper recruitment services which add more value".
The government is hoping that job creation in the private sector will help sustain growth as the tightening of the public sector purse strings takes effect, with 300,000 public sector jobs expected to be cut.