The Recruitment and Employment Confederation (REC) and KPMG Report on Jobs – just published – provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies.  

Recruitment consultants signalled a further increase in permanent staff placements during September. Although strong, the rate of growth eased to a ten-month low. Agencies’ temporary/contract staff billings rose at a strong and accelerated pace in September. The latest expansion was the seventeenth in as many months. Tight candidate availability persisted in September, with marked declines in both permanent and temporary staff supply signalled.

Growth of permanent staff salaries remained strong in September, despite easing to a four-month low. Hourly pay rates for temporary/contract workers rose at the fastest pace since November 2007. Growth of permanent staff placements was broad-based across the four monitored English regions during September. The North saw the strongest increase, while the slowest rise was signalled in London. Growth of temp billings was fastest in the Midlands during September. The South posted the weakest expansion.

Demand for staff rose at a considerably stronger pace in the private sector than the public sector during September. The fastest growth rate was indicated for private sector temporary vacancies, while the slowest rise was signalled for public sector short-term roles. Engineering was the most in-demand category for permanent staff during September, as was the case one year previously. The slowest rise in demand was reported for Hotel & Catering workers. Nursing/Medical/Care remained top of the demand for staff ‘league table’ for short-term roles in September, closely followed by Engineering. The slowest growth was signalled for Executive/Professional roles.

Kevin Green, REC chief executive, says: “Once again more people have secured permanent and temporary jobs via recruiters than in the previous month, a sign of the continued strength of the UK’s labour market. “Hourly pay for people on temporary contracts has risen at the fastest pace for nearly seven years, which shows that employers are bringing in temps and contractors with the skills they need quickly and are willing to pay to do so. “The increasing lack of candidates continues to be a worry as shortages spread across more industries. It’s not just engineers and IT specialists that recruiters are finding it hard to source – blue collar roles like bricklayers, drivers and electricians are getting harder and harder to fill too.”

Bernard Brown, Partner and Head of Business Services at KPMG,comments: “Buoyancy is back in British businesses, with low and falling unemployment evident today and the promise of lower corporation tax rates, tomorrow.  Combine the two and it would be easy to assume that the only curve we will see is an upward one, yet there are still areas of the UK where the signs suggest we are not quite ready to turn the corner.  Youth unemployment is, for example, still too high and the next few months will be a critical test of how businesses can help get the new generation of workers onto the employment ladder.

“It won’t be easy as the latest figures suggest that as many organisations come to the end of their financial year, purse strings have been tightened and recruitment decisions are put off until new budgets are agreed.  With permanent placements slowing to a ten month low, perhaps the uncertainty caused by political crises across the globe are beginning to affect decision-makers’ confidence. “At the same time wages continue to dominate debate around the strength of the labour market. Starting salaries might look healthy, and are undoubtedly tempting some people to move, but the reality is that employers will soon reach a ceiling beyond which they won’t be able to throw more cash around to land the right candidate. It also seems that the incentive for taking on temporary roles is strengthening as pay packets improve, and if the cost of living continues to rise as expected, we may yet see candidates forced to choose between securing financial rewards in short bursts or long-term security.  As we enter the tail end of the year, the hope must be that this is a short-term blip, rather than heralding a winter of discontent.”