Staff Appointments Continue to Rise Strongly in February

Key points: 

 

• Softer rise in permanent placements as temp billings growth accelerates
  
• Starting salary inflation holds close to 31-month high amid candidate shortages
  
• Growth in staff vacancies edges down to 14-month low

 

Summary:

 

The IHS 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.  

Permanent placements expand at softer, but still marked, pace

 

Permanent staff placements continued to rise across the UK in February. Though sharp, the rate of expansion moderated slightly since the start of the year. Temp billings meanwhile rose at a faster pace midway through the first quarter.

Staff vacancies rise to weakest extent for 14 months

 

Although demand for staff remained robust in February, overall growth of demand softened to its slowest in over a year. Slower increases in staff vacancies were seen for both permanent and temporary positions.

 

Candidate supply drops at slower rate 

 

Recruitment consultants reported continued difficulties regarding the availability of suitable staff for permanent and temporary roles in February. That said, rates of deterioration weakened since January and were the least marked for 11- and 13-months, respectively. 

Pay growth remains sharp

 

The rate of starting salary inflation eased from January’s 31-month peak but remained sharp in February. Temporary/contract staff hourly pay rates also rose further, and at a faster pace than recorded in January.

Regional variation

The Midlands saw the quickest increase in permanent staff placements on a regional basis. Nonetheless, rates of expansion were sharp elsewhere with the exception of London, where permanent placements rose at a modest pace that was the weakest for five months.

Temp billings growth was fastest in the Midlands, closely followed by Scotland. Expansions were also sharp in the three remaining regions covered by the survey.

Sector variation

 

Private sector demand for staff rose at a considerably stronger pace than in the public sector, according to latest jobs survey data. 

In the private sector, growth of permanent staff vacancies continued to outstrip that for temporary roles. In contrast, the public sector registered stronger demand for temporary staff compared to permanent workers. 

The strongest growth of demand for permanent staff was signalled within the IT & Computing sector during February. Engineering and Accounting/Financial workers also registered a marked rise in demand for their services. Nonetheless, vacancies also rose across all of the remaining job categories.

Nursing/Medical/Care employees were the most in-demand type of short-term staff in February, slightly ahead of Blue Collar. Construction workers registered the weakest growth of demand.

Kevin Green, REC Chief Executive says:

 

“Even with employer uncertainty, demand for staff continues to rise. At the same time candidate availability is still dropping, which means that employers in all sectors are struggling to recruit for the roles they desperately need to fill.

“Nursing in particular remains an area of shortage as nurses continue to leave the NHS and recruitment gets tougher. Recruiters tell us that demand for temporary medical staff is higher than every other sector and ONS data supports the idea that a huge number of vacancies exist across NHS trusts. 

“Employers need to make their jobs attractive to candidates to attract talent and skills to their organisation. Increasing starting pay is a good step, but it isn’t enough. Businesses need to focus on creating a great culture and investing in their people. The opportunity for development and the ability to progress are key for people looking to move job. 

“Government has a critical role to play. Post-Brexit, we will continue to need people from the EU to work in UK institutions like the NHS, and this needs to be as easy as possible without unnecessary cost or bureaucracy. We also need to develop skills across all sectors of the economy and the best way to do this is by broadening the apprenticeship levy into a wider training levy.”