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.  

Stronger growth of staff appointments

Permanent staff placements rose further in February. The rate of growth in appointments was marked and the fastest since last October. Temp billings meanwhile increased at the sharpest pace in five months.    

Buoyed by improved demand for staff

Vacancies available for people seeking employment continued to rise in February. Overall demand for staff rose at the strongest rate in four months, with both permanent and temporary workers seeing faster increases. 

Further marked rise in salaries

Permanent staff starting salaries continued to increase in February. The rate of growth was unchanged from the marked pace seen in January. Temporary/contract staff hourly pay rates also rose further, with the latest increase stronger than seen one month previously. The availability of staff to fill job vacancies decreased further in February. Both permanent and temporary candidate supply deteriorated to a greater extent than in the previous month, with the former recording the sharper decline.

Regional and sector variation

The fastest growth of placements was signalled by Midlands-based consultancies, while those in London reported the slowest rise.Temp billings rose at the fastest rate in the Midlands, while the slowest growth was indicated by agencies based in the North. Private sector demand for staff remained substantially stronger than that from the public sector during February. The sharpest increase overall was signalled for private sector permanent employees.

Engineering was the most sought-after category for permanent staff in the latest survey period, ahead of Nursing/Medical/Care. The weakest growth of demand was signalled for Hotel & Catering workers.

 Demand rose for all monitored temporary/contract staff categories during February, with Nursing/Medical/Care retaining its lead in the demand for staff ‘league table’. The slowest growth was recorded for Executive/Professional.

Bernard Brown, Partner and Head of Business Services at KPMG, comments:

“Recovery in the job market is gaining real traction, and this should help shore up consumer confidence in the run up to the election.However, while the job market might be booming, demand for staff is by no means universal across the sectors.  The recovery is being heavily driven by hiring activity by UK plc, while the public sector remains in a semi-stasis ahead of further anticipated cuts later in the year.The availability of skilled candidates remains a significant concern and businesses are already fiercely competing to secure top talent.  This dynamic is driving significant salary growth in pockets of the market, such as the IT and engineering sectors, where the demand/supply mismatch is particularly prevalent.”

Kevin Green, REC chief executive, says:“Recruiters are reporting talent shortages across the economy as businesses expand in response to increasing demand.This is a major challenge for employers, however those seeking work are feeling the benefit. A third of recruiters say that starting salaries for permanent jobs are increasing as competition for skilled staff drives up pay. The question now is about sustainability. Skills shortages are threatening economic growth so politicians need to help business  address this issue by equipping jobseekers with the skills that businesses require and ensuring employers can access the skilled workers they need from abroad.”This month’s report again highlights skill shortages in engineering and construction, which threaten to delay major infrastructure projects such as HS2 and new housebuilding initiatives.Candidates for marketing and customer service roles are now also becoming hard to fill. Demand for these roles is a sign that businesses are responding to increasing consumer and business confidence.”