The latest Markit/REC Report on Jobs has revealed that as candidate availability continues to decline, demand for staff continues to increase, with starting salaries rising at a rate not seen for 19 months.
Permanent placements continued to rise sharply in June, despite the rate of expansion easing slightly since May’s 25-month peak. Growth in temp billings also softened in June, but remained steep overall. Demand for staff continued to rise last month too, with the rate of growth staying close to May’s recent peak. This was despite both permanent and temporary vacancies rising at slightly weaker rates than in the previous month.
Permanent starting salaries rose at a sharp and accelerated rate that was the fastest in the 19 months in June. Growth in hourly pay rates also quickened since May, reaching a six-month record.
However, the pool of available candidates for both permanent and temporary roles continued to shrink in June. While the number of permanent candidates fell at a slightly softer pace than in May, the supply of temporary labour deteriorated at the quickest rate in 18 months.
On a regional basis, Scotland noted the sharpest growth in permanent placements, followed by the Midlands. The weakest rate of expansion was recorded in London. Scotland also saw the strongest upturn in temp billings of all monitored UK regions in June. Nonetheless, all of the remaining regions also noted marked rates of expansion.
Recruitment agencies registered a broad-based upturn in demand for permanent staff during June. Engineering placed first in the rankings, followed by Accounting/Financial. Nonetheless, demand rose sharply in all of the other monitored job sectors. Hotel and Catering pipped Nursing/Medical/Care to the top spot for demand for temporary staff in June, with demand growth sharp for both job categories. The weakest increase in demand was seen for Executive/Professional roles.
Tom Hadley, the Recruitment & Employment Confederation (REC)’s Director of Policy, commented: “With fewer people currently looking for jobs, employers are having to increase starting salaries to secure the talent they need. This is creating great opportunities for people with in-demand skills who are prepared to change jobs, but it’s also putting unsustainable pressure on many businesses.
“Existing skills shortages are being exacerbated by Brexit. For example, demand for accountants and other financial roles has increased recently as organisations try to protect themselves against economic uncertainty. London alone employs almost 200,000 EU nationals in these roles. Policies which make it more difficult to recruit and retain these people will put business growth at risk.
“Investment in training the domestic workforce is vital to the long-term health of the jobs market, but it won’t allay employers’ fears about losing access to workers from the EU. The government needs to outline a five-year roadmap for post-Brexit immigration policy to enable businesses to plan effectively, and so the UK economy can flourish.”