REC/KPMG Report on Jobs: Staff Appointments Continue to Rise in June, but Rate of Growth Eases

Key points:

• Slowest rise in permanent placements for over two years

• Temp billings growth moderates to eight-month low

• Recruiters signal ongoing candidate shortages

   

  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.  

Slower rise in permanent placements…

June data signalled a further increase in permanent staff placements. Although remaining stronger than the survey’s long-run average, the rate of expansion eased to the slowest in 25 months.     

...while temp billings growth also eases

The rate of growth in temporary/contract staff billings moderated to an eight-month low in June, although remained marked overall. 

Candidate availability remains tight…

Recruitment consultants reported that a key factor weighing on growth of staff appointments was shortages of qualified candidates. Although easing slightly since May, rates of decline in both permanent and temporary candidate availability remained considerable.

…fuelling further pay increases

The rate of permanent salary inflation remained strong and well above the survey’s historical trend in June, despite easing to a four-month low. Temp pay growth moderated to the slowest in 14 months, but again remained marked overall.

 

Regional and sector variation

Permanent placements rose across all four English regions during June. The Midlands posted the strongest rate of growth, while the slowest rise was signalled in the South.

 

Temp billings growth was strongest in the Midlands during the latest survey period, with London posting the weakest expansion. 

 

Private sector jobs continued to register stronger demand growth than public sector roles during June. Private sector permanent staff again saw the fastest rise overall.

 

Engineering was the most in-demand category for permanent staff during the latest survey period, followed by Executive/Professional. The slowest growth of vacancies was signalled for Hotel & Catering workers.

 

Demand rose for all nine monitored temporary/contract staff categories during June. The sharpest increase was signalled for Nursing/Medical/Care workers, while the slowest expansion was recorded for Executive/Professional staff.

Comments:

REC Director of Policy Tom Hadley, says:

 

“Businesses are really struggling to find the people they need. Vacancies continue to rise, candidate availability has fallen steeply and we’re seeing this affect the amount of placements being made each month. Starting salaries are being pushed up as demand exceeds supply, but the concern is that business growth is being constrained.

 

“The government’s restrictions on visas for skilled professionals aren’t helping matters, and the prospect of new salary thresholds for Tier 2 Visas could substantially damage the competitiveness and productivity of UK businesses. Large scale infrastructure projects such as railway upgrades could also be held back if we haven’t got the right people to fill roles.

 

“We urge the Migration Advisory Committee to take account of up-to-the-minute data like Report on Jobs to inform its recommendations to government.”

  

Bernard Brown, Partner at KPMG, comments:

 

“The number of skilled workers looking for new roles fell considerably in June, stifling hiring activity and leaving the job market feeling somewhat lethargic.

 

“This growing skills shortage is cross sector and cross discipline: recruiters are struggling to fill vacancies for everything from software engineers to sales.  The lack of qualified candidates is also driving up salaries, with the right individual able to command a significant premium from businesses anxious to secure their skills and experience.

 

“The primary concern remains the impact this unwanted pause in recruitment will have on the performance and productivity of UK plc; without the right staff it will be very difficult for businesses to keep pace with demand, let alone achieve their long term growth potential.”

 

ENDS