Growth slow, but beware of skills shortages, warns REC

Jo Faragher

Jobs growth is at its slowest for seven months, according to the latest round of figures from the Recruitment and Employment Confederation. 

The REC/KPMG Report on Jobs for March found that permanent placements and temp billings increased, but at a weaker pace.

Skills shortages appear to be on the rise, with figures showing the availability of candidates to fill permanent roles decreasing for the fourth successive month. However, the availability of temporary and contract staff grew slightly.

Both permanent and temporary/contract pay rates increased at a moderate rate during March – temporary rates were at their highest in 12 months.

London, despite two months of growth, experienced a decline in the number of permanent placements made. The Midlands, North and South all registered higher numbers of placements into permanent roles.

Demand for temporary workers in the public sector increased for the first time in three months, although demand for permanent staff decreased slightly. There was continued growth in the private sector, where both permanent and temporary roles increased.

The most in-demand category for temporary staff was nursing/medical/care, for the fourteenth consecutive month. There was also healthy demand for engineering and construction workers.

Commenting on the figures, REC Chief Executive Kevin Green said: “The fact that in March more people secured jobs than in the previous month is obviously good news, although the rate of growth has slowed. However, the most significant issue is the emergence of a two-speed labour market, with a lack of candidates for highly skilled roles at the same time as persistent levels of unemployment.”

He added that agencies were finding that hiring companies are willing to pay higher salaries for the right talent as availability decreases, but warned that skills shortages could impact on critical infrastructure projects.

He concluded: “The government needs to build the talent pipeline for the future by increasing funding for apprenticeships in sectors where there is demand, refocusing the Work Program to train people who have potential but who lack the skills to fill current vacancies and driving take-up for existing schemes like the Youth Contract.”