Firms remain cautious about hiring staff because of the continued economic uncertainty, with some downgrading plans to take on permanent workers, according to a new study.
A survey of 600 companies by the Recruitment and Employment Confederation has revealed increased demand for flexible staffing. This follows the trend of record numbers of agency workers being recruited by businesses.
Just over two thirds of employers said they planned to increase their permanent workforce over the next quarter, down from 74% last month.
However, four out of five predicted that their use of agency workers will grow or at least stay at current levels.
One in five of the private firms questioned also said the cuts in public spending were having a serious impact on their business.
Roger Tweedy, the confederation's director of research commented: "With the economy continuing to stagnate, businesses will understandably remain cautious which is why we are seeing an increase in the longer term demand for flexible staff such as temporary and contract workers."