Report on Jobs: Tight labour market conditions lead to further rapid increases in starting pay

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Report on Jobs: Tight labour market conditions lead to further rapid increases in starting pay

2022-05-25T10:01:17+01:00 May 25th, 2022|News, All, Recruitment|

Key findings

  • Starting salary inflation holds close to record high
  • Labour shortages lead to slower rise in staff placements
  • Demand for staff remains robust

Data collected April 11-25

Summary

Recruitment activity across the UK continued to rise at a robust pace in April, according to the latest KPMG and REC, UK Report on Jobs survey. However, ongoing candidate shortages weighed on overall growth, with both permanent placements and temp billings expanding at the slowest rates for at least a year as recruiters struggled to fill a number of roles. Although easing slightly from the previous month, the deterioration in total candidate supply remained rapid in April.

Demand for staff rose at a historically sharp pace, despite a slight softening in the rate of overall vacancy growth. Increased competition for scarce candidates placed further upward pressure on pay, with the pace of starting salary inflation holding close to March’s survey record.

The report is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.

Permanent placement growth slips to 13-month low

Recruitment consultancies across the UK registered further sharp rises in both permanent placements and temp billings at the start of the second quarter amid reports of rising activity at clients and robust demand for staff. That said, the rates of growth eased to 13- and 12-month lows, respectively, as low candidate supply constrained the overall upturns in hiring activity.

Slower, but still rapid, reduction in candidate availability

The overall availability of candidates fell for the fourteenth month in a row in April. The rate of contraction was substantial and much quicker than the series average, despite softening to the weakest for three months. The supply of permanent labour continued to fall at a faster pace than that seen for temporary staff. Recruitment consultancies often mentioned that candidate numbers had fallen due to tight labour market conditions, fewer foreign workers and hesitancy to seek new roles due to the pandemic and geopolitical uncertainty.

Substantial increases in starting pay for both permanent and temporary workers

A combination of robust demand for staff and scarce supply drove further marked increases in starting pay during April. Notably, the rate of starting salary inflation weakened only slightly from March’s record pace (which was the strongest since data collection began in October 1997). Temp wage growth also eased on the month, but remained historically sharp.

Total vacancies continue to rise sharply

Recruitment consultancies signalled a further steep increase in overall vacancies during April, despite the rate of growth easing slightly since March. Permanent staff demand continued to rise at a slightly quicker pace than that seen for temporary workers.

Regional and Sector Variations

On a regional basis, the Midlands posted the steepest increase in permanent placements at the start of the second quarter. That said, rates of growth slowed across all four monitored English areas.

The upturn in temp billings was broad-based across the four monitored English regions, and was led by the Midlands.

Latest data pointed to slower rises in vacancies across both the private and public sectors. That said, increases across all categories remained sharp overall. The steepest upturn in vacancies was signalled for permanent private sector roles, while the softest was noted for temporary positions in the public sector.

All ten monitored job categories saw sharp increases in demand for staff in April, led by Hotel & Catering. Engineering and Blue Collar came in second and third place in the rankings, respectively.

Hotel & Catering also saw the sharpest rise in temporary staff vacancies at the start of the second quarter. The softest, but still marked, increase in demand for short-term staff was signalled for Accounting/Financial.

About Aspire Cambridge

Headquartered in Cambridge Aspire Cambridge have been providing cost effective Recruitment, HR and Travel solutions to an impressive portfolio of customers spanning the UK and Europe since 2018.

Aspire Recruitment | 01223 855440 (Multi Award Winning)
We work with countless growing businesses and cover a wide geographical landscape, across the UK and internationally. We have built up a strong reputation as the preferred recruitment partner for many start-ups and small to large sized businesses, both locally and further a field.

Aspire HR | 01223 855441 (Multi Award Winning)
Few businesses can afford a full time HR professional. Aspire HR is your flexible HR manager; here to help you protect your business, leaving you to concentrate on what you do best – run your business. We help businesses to grow and be profitable, and we look to partner with you to build strong long-standing relationships.

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We’re here to make planning your next business trip or holiday stress-free and easy. Whether you know exactly what you want or need some travel inspiration, we’ll use our knowledge and expertise to create a bespoke holiday you’ll love. From the whole package to those finishing touches such as car hire and travel insurance, we’ve got you covered!

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