- 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
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.
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