05 Sep, 2014

Demand for staff increases

The Recruitment and Employment Confederation (REC) and KPMG Report on Jobs – published today – provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies.

– Demand for staff increases at fastest pace since April 1998
– Growth of staff appointments remains marked, despite easing
– Candidate shortages fuel strong pay growth
Growth of staff appointments eases but still marked…

Permanent placements growth remained strong in August, although eased from the five-month high recorded in July. Temp billings also rose at a marked pace, albeit the slowest since May.

…supported by fastest rise in vacancies for over 16 years

The number of available job vacancies rose further in August, with the rate of expansion the sharpest since April 1998. Both the private and public sectors saw increased demand, with the former recording the sharper growth.

Strong pay growth…

Permanent staff salaries continued to rise at an elevated rate in August, with the latest increase only slightly slower than June’s survey-record. Temp pay also rose strongly, and at a faster pace than in July.

…underpinned by tight candidate availability

The availability of staff to fill job vacancies fell further in August. Permanent candidates were in particularly short supply, with the latest decline in availability again steep albeit easing from July’s series-record.

Regional and sector variation

All four English regions monitored by the survey saw increased placements in August, with the South posting the fastest expansion.
The Midlands led a broad-based rise in temp billings during the latest survey period.
Demand for staff continued to rise at a considerably stronger rate in the private sector than in the public sector during the latest survey period.
Demand rose for all nine categories of permanent staff monitored by the survey in August. Engineering workers saw the strongest expansion of vacancies, while Hotel & Catering roles registered the slowest growth.
Nursing/Medical/Care was the most sought-after category for temp workers in August, closely followed by Engineering. The slowest growth was signalled for Executive/Professional workers.
REC CEO Kevin Green said:

“It’s more great news for people looking for work this month, as we see more people being placed into jobs across all regions and sectors including construction, IT and engineering.

“The jobs market is often criticised for being London-centric but our data shows that rates of growth for both permanent starting salaries and temp pay rates are faster in the South, Midlands and North this month. Recruiters tell us that the driver behind this increase is the competition to attract and retain the skilled people outside London.

“While immigration has increased according to government figures, this clearly has had little impact on the jobs market. As skills shortages increase and employers struggle to find the people they need, politicians from all parties should focus on ensuring that we have a visa and immigration regime that supports UK businesses.”

Bernard Brown, Partner and Head of Business Services at KPMG, comments:

“Just when it seemed the UK’s economy had definitely turned a corner, a couple of warning shots have been fired across the bows of British business to suggest that everything is not quite ‘ship shape’.  Jobs are still being offered, and are still sought after, but today’s figures show that permanent and temporary placements have eased in recent weeks.  It may be down to holiday season, yet with these figures following the latest manufacturing output data which also revealed slower growth, it wouldn’t be surprising if the confidence expressed earlier in the year is reaching a peak.

“The problem is exacerbated by the fact that employers still cannot find staff with the right skill set.  Their desperation to fill recruitment holes is leading to continued wage growth, which is creating a market that is both unsustainable and unrealistic. With vacancy growth reaching its highest since the survey began, I believe that the nervousness in the marketplace is more about the consequences of investing in the wrong people, than it is about spending money in an attempt to recruit the best talent.  It’s a conundrum British business will have to solve quickly because if the job market stagnates the wider impact on performance will end up harming productivity.”

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