Permanent Placements Increase at Slowest Pace Since Last September

 

Key points: 

 

• Permanent placements growth slows, but temp billings rise at sharpest pace for four months
  
• Steepest drop in candidate availability for 16 months
  
• Demand for permanent and short-term staff remains marked
  

Summary:

 

The Markit/REC Report on Jobs – published today – provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies.  

Slowest increase in permanent placements for seven months 

 

Growth in permanent staff placements slowed to its weakest for seven months during April, but was nonetheless solid overall. In contrast, temp billings increased at a sharp and accelerated pace that was the fastest seen in 2017 so far. 

Sharper drop in candidate availability

 

The availability of permanent and temporary candidates declined at sharper rates in April, with the former posting the quicker pace of reduction. Notably, both categories saw the steepest deteriorations in candidate availability for 16 months.    

Strong growth in salaries sustained...

 

Although growth in permanent starting salaries edged down to a four-month low in April, it remained sharp overall and stronger than the series average. Meanwhile, hourly pay rates for short-term staff increased at the sharpest pace in 2017 so far.  

...as demand for staff remains sharp

 

Vacancies continued to rise markedly in April for both permanent and temporary/contract staff. This was despite growth in demand for both types of staff softening slightly since the previous month. 

Regional variation

 

The Midlands saw the fastest rate of expansion in permanent placements, closely followed by Scotland. Meanwhile, London saw the slowest increase. 

Temp billings growth was recorded across all monitored regions, led by Scotland and London. The weakest increase was registered in the South of England. 

Sector variation

 

Latest data pointed to divergent sector trends, with demand for staff rising sharply across the private sector, but declining across the public sector. Demand for private sector permanent and temporary staff rose sharply despite the rates of expansion easing to four- and three-month lows, respectively.  

At the same time, vacancies for permanent public sector staff declined for the second month in a row, albeit slightly. Demand for public sector temporary workers meanwhile fell for the first time since January, though only slightly.  

Engineering was the most in-demand category for permanent staff in April, closely followed by IT & Computing and Nursing/Medical/Care. Nonetheless, strong expansions were seen across the board at the start of the second quarter. 

April data signalled a broad-based upturn in demand for temporary/contract workers in the UK.

Nursing/Medical/Care continued to top the table, while Hotels & Catering placed second in the overall rankings.

REC Chief Executive Kevin Green says:

“Demand for staff is growing within all sectors and all regions of the UK, but there are fewer and fewer people available to fill the vacancies. We have the lowest unemployment rate since 2005, and people already in work are becoming more hesitant about moving jobs amid Brexit uncertainty. Meanwhile, the weakening pound and lack of clarity about future immigration rules is putting off some EU nationals from taking up roles in the UK.  

 

“As a result, candidate availability is at a 16-month low and recruiters are flagging a shortage of suitable applicants for more than 60 different roles from cleaner to accountant. Every shortage has wider implications, for example the exceptional reputation UK engineering enjoys globally is at risk because employers can’t find people with the skills they need. 

 

“One thing is for certain, if British business is to thrive then whichever party forms a government after 8 June needs to address the ever-shrinking pool of suitable candidates by investing in skills and career advice for UK jobseekers, as well as safeguarding access to the workers we need from abroad. It is vital that the future immigration system is agile enough to reflect and adapt to evolving labour market needs.”