– Fastest rise in short-term appointments since July 1998
– Permanent placements growth eases, but remains strong
– Total vacancies increase at sharpest rate in over six years
– Permanent salary inflation strongest in five-and-a-half years
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.
Temp billings growth at 15-year high…
Agencies’ billings from the employment of temporary/contract staff increased strongly in August, with the rate of expansion picking up to the fastest since July 1998. Higher temp billings were supported by the sharpest rise in demand for short-term workers since December 2000.
…while permanent placements also rise strongly
The number of staff placed in permanent roles continued to increase at a marked pace in August, although growth eased from July’s 40-month high. Underpinning the rise was the fastest increase in available permanent vacancies since June 2007.
Sharpest rise in permanent salaries since February 2008
The rate of inflation of permanent staff salaries accelerated in August, reaching its fastest pace in five-and-a-half years. Temp pay rates also continued to rise, although the pace of inflation was slightly slower than the five-and-a-half year high seen in July.
Candidate availability continues to fall
The availability of staff to fill permanent job vacancies continued to decline in August, extending the current sequence to four months. The latest fall was solid, albeit slightly weaker than in July. Reflecting the strong trend in temp hiring, the availability of short-term workers deteriorated at the sharpest rate in six years.
Regional and sector variation
All four English regions saw increased numbers of permanent staff placements during the latest survey period. The sharpest rise was signalled in the North, while the slowest growth was registered in London.
Higher temp billings were registered in all four English regions during the latest survey period, led by the North.
The private sector continued to register a much stronger trend in demand for staff than the public sector during August. Marked rates of expansion were indicated for both permanent and temporary workers in the private sector.
In the public sector, demand for permanent staff fell for a second consecutive month, while demand for temporary staff was moderately higher.
Growth of demand was signalled for all nine types of permanent staff monitored by the survey in August. The strongest rate of expansion was indicated for Engineering workers, while Hotel & Catering employees saw the slowest rise in vacancies.
Increased vacancy levels were broad-based across all nine temporary/contract staff sectors during the latest survey period. The sharpest rise in demand was signalled for Engineering workers.
REC chief executive Kevin Green says:
“August was an extraordinary month for the UK jobs market, with temp placements growth hitting a 15 year high. Our temporary worker index is the highest we have seen since 1998, the same summer Google was founded and France won the World Cup for the first time. There is more good news for all workers with pay rates for temps rising for the seventh consecutive month and starting salaries for permanent staff increasing at the highest rate in five and a half years.
“Vacancy growth has hit a six year high and fluidity is returning to the jobs market, so over the coming months we expect to see a noticeable improvement in official employment figures. The major issue now is the worrying lack of candidates to fill the jobs being advertised. In August, the number of vacancies increased at the sharpest rate in over six years but the availability of staff keeps declining.
He added: “This month’s figures should be celebrated and efforts should be focused on addressing the skills gap rather than picking holes in flexible working.”
Bernard Brown, Partner and Head of Business Services at KPMG, comments:
“With retail sales up and the OECD sharply increasing its growth forecast for the UK economy, it’s no surprise to see that confidence amongst employers is gaining momentum.
“Demand for staff has increased at its sharpest rate for over six years and whilst the thirst for permanent employees remains strong, the real success story revolves around the ‘return to work’ prospects offered by the surge in temporary and short-term placements. With these roles seeing their fastest rise for 15 years, it means opportunities to get back into the labour market for people with other commitments are becoming more of a reality than a wish. If we continue on this trajectory, it could also mean that Mark Carney will have to consider raising interest rates sooner than first thought.
“It’s a trend that is being replicated across the country, and the demand for staff is good news for prospective employees. In the current marketplace, organisations seem increasingly willing to pay more for top talent, with the latest figures showing the rate of starting salaries accelerating to a 5 and half year high. Increasing the pounds in candidates pockets may sound like good news; it is – but employers must make sure they are paying the right price for the right person and not simply racing to fill a vacancy.”