REC/KPMG Report on Jobs: Permanent Placements Rise at Fastest Rate in Five Months

Friday, 8th August, 2014 

Key points:

• Stronger growth of permanent and temporary staff appointments
• Record decline in availability of permanent candidates
• Starting salary growth close to June’s survey-high

Summary:

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.  

Acceleration in growth of staff appointments…

Recruitment consultancies placed greater numbers of people into permanent and temporary roles during July, with rates of expansion accelerating to five- and seven-month highs respectively.

...buoyed by strengthened demand from employers

Latest data signalled that available job vacancies continued to rise apace in July, with growth quickening to the fastest since January. The private sector remained the principal engine of job creation, although the public sector recorded a solid increase in vacancies.  

Record drop in availability of permanent candidates...

Permanent staff availability fell further in July, with the rate of decline accelerating to the sharpest in the survey history. Temporary/contract staff availability meanwhile decreased at the fastest pace since March 1998. 

...fuels sharp increase in salaries

Average starting salaries for people placed in permanent jobs continued to rise strongly in July. The rate of increase was only fractionally below June’s survey-record high. Temporary/contract staff pay growth was also marked, despite easing from the 79-month high recorded in June.

Regional and sector variation

Each of the four English regions covered by the survey registered higher permanent placements in July, with the sharpest growth signalled in the South. 

The Midlands posted the strongest expansion of temp billings during the latest survey period, with growth there considerably faster than in the other regions.

Latest data indicated that private sector demand for staff remained considerable stronger than that in the public sector during July. The strongest overall rise in demand was recorded for private sector permanent employees, where growth was at a five-month high.  

Construction workers were the most in-demand type of permanent employee during the latest survey period, closely followed by Engineering staff. All categories recorded strong rates of growth.

All nine monitored temporary/contract staffing categories recorded higher demand during July. Mirroring the trend for permanent employees, Construction workers were the most sought-after.

REC CEO Kevin Green said:

“The jobs market continues to go from strength to strength with a further increase in the number of people finding new jobs last month, and both starting salaries and hourly pay rates continuing to grow.

“Over a third of recruiters report they secured higher salaries for candidates they placed into permanent jobs in July, than for the equivalent roles in June.

“The UK’s post-recession problem is skill and talent shortages. The economy is going to be constrained by this ongoing talent crisis if employers keep doing business as usual. Hirers need to take on more young people and train and develop their employees like never before. Investing in staff development will help companies attract and retain talent. And our policy makers need to put politics to one side and take a sensible approach to immigration which focuses on helping British businesses get the skilled people they need.”

Commenting on the fact that the construction sector topped the tables for demand for both permanent and agency staff Kevin Green added:

“The demand for staff in UK construction shows the industry is rising out of the recession. But without more people skilled, available and willing to take jobs as site managers, joiners and electricians we can’t build the new homes and infrastructure that this country desperately needs.”

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

“For the first time in months we are witnessing churn in the labour market. It seems that employees are finally beginning to wake up to the opportunities available to them, with the rates of growth of both permanent and temporary placements accelerating simultaneously for the first time since the winter.

Perhaps it’s true that ‘every person has their price’ because the movement in labour is coinciding with another rise in starting salaries.  Just a few months ago employers couldn’t tempt staff to switch roles, but indications are that employees’ caution over change is being replaced with hunger for something new.  It’s particularly prevalent in the Midlands; all the indications are that if you want a new job and want an improved salary offer, the central part of the UK is the place to be.”