Growth in permanent roles outstrips that for temp billings

March data signalled a further sharp increase in permanent staff placements across the UK, while temporary billings expanded at the weakest pace for over a year.

That’s according to this month’s Report on Jobs by the Recruitment and Employment Confederation (REC).

Overall candidate availability continued to decline sharply during March, though the latest reduction was the weakest seen for one year. A softer drop in permanent candidate supply contrasted with a slightly quicker deterioration in short-term staff availability.

Meanwhile, staff vacancies continued to rise markedly at the end of the first quarter. This was despite growth of demand easing slightly to the lowest for 15 months, driven by a weaker upturn in temporary staff positions.

The upturn in permanent staff placements was once again led by the Midlands, though rates of growth were marked in all of the other four UK regions monitored by the survey. On a regional basis, Scotland recorded the sharpest rise in temp billings at the end of the first quarter. Growth was also sharp across the Midlands and the South of England, while modest upturns were registered in London and the North of England.

However, starting salaries, particularly for temporary roles, are accelerating due to a higher demand of staff in areas such as hospitality, where recruiters are reporting a decrease in applicants from EU nationals since the Brexit vote. The REC’s director of policy, Tom Hadley, is urging employers to focus on ways to continue making themselves attractive to EU nationals post-Brexit, and for the government to allow for this.

He said: “Permanent placements are growing month on month as demand for staff remains high. More people are entering employment, but it doesn’t make up for the shortfall of candidates for many roles, from cyber security and aerospace through to sewing machinists and drivers.

“As a result, employers are increasing starting pay to draw candidates away from current roles into new positions. Growth in pay for temporary roles especially is accelerating. In hospitality, demand for temporary staff is really high, but businesses have had fewer applicants from the EU since the Brexit vote. Employers are working hard to make themselves attractive to UK nationals, but they will still need temporary roles to be filled by EU nationals post-Brexit and the government must allow for this.

“Candidates planning to move jobs have a strong chance of getting a pay rise. With inflation outstripping pay growth for over a year now, high pay offers will be tempting, as the pressure on starting salaries still isn’t translating into pay rises for staff who stay put. Employers need to look at other means to keep staff, such as creating a good workplace culture and offering progression opportunities.”