Report on Jobs: Hiring activity growth softens further in May

/, All, HR News, Recruitment/Report on Jobs: Hiring activity growth softens further in May

Report on Jobs: Hiring activity growth softens further in May

2022-06-10T15:27:44+01:00 June 10th, 2022|News, All, HR News, Recruitment|

Key findings

  • Slower increases in permanent placements and temp billings
  • Downturn in candidate supply eases only slightly
  • Pay pressures remain historically sharp

Data collected May 12-25

Summary

The latest KPMG and REC, UK Report on Jobs survey, compiled by S&P Global, pointed to a further slowdown in hiring activity midway through the second quarter. Recruiters noted the softest upturns in permanent placements and temp billings since early-2021, with a number of panellists stating that candidate shortages had hampered their ability to fill roles. Overall candidate availability continued to fall sharply, albeit at the weakest rate since January.

At the same time, there was a further steep increase in demand for staff, though growth of total vacancies edged down to a three-month low. A shrinking pool of candidates and strong vacancy growth meant that rates of starting pay continued to rise sharply, particularly for those taking up permanent positions.

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

Sustained slowdown in growth of recruitment activity

May survey data pointed to a further robust increase in hiring activity across the UK, though there were signs of a further slowdown in overall growth. Notably, permanent staff appointments expanded at the softest rate since March 2021, while temp billings increased at the weakest pace in 15 months. Recruiters often mentioned that candidate shortages had weighed on placements.

Candidate availability continues to fall rapidly

A further marked deterioration in overall candidate supply was seen in May. This was despite the rate of reduction easing to the softest in four months. Underlying data indicated that permanent candidates continued to decline at a faster pace than that seen for temporary workers. Moreover, the latest reduction in short-term staff supply was the least severe for just over a year. Panel members often mentioned that greater caution around the outlook, widespread skills shortages and fewer foreign workers had weighed on staff availability.

Overall vacancies expand sharply

Demand for staff continued to rise at a historically sharp pace in May. Broken down by job type, permanent vacancies continued to expand at a quicker rate than that seen for temp roles. Notably, demand for short-term staff increased at the softest pace for five months.

Starting salary inflation remains close to record-high

With the supply of workers falling further and demand for staff remaining robust, recruiters noted sustained upward pressure on rates of starting pay in May. Despite softening to a four-month low, permanent starters’ salaries rose at a rapid pace that was among the quickest since the survey began in October 1997. Temp pay growth was also sharp, albeit the slowest seen for 11 months.

Regional and Sector Variations

London registered the strongest increase in permanent placements of all four monitored English regions, while the softest was seen in the South of England.

All four monitored English regions registered softer rises in temp billings in May except the  North of England, which saw the strongest overall rise.

Sector data showed that demand for staff in the private sector continued to outpace that seen in the public sector during May. The quickest rise in vacancies was seen for permanent roles in the private sector, even though the pace of expansion softened to a 13-month low. Meanwhile, the softest upturn in demand was signalled for short-term staff in the public sector.

IT & Computing posted the strongest increase in demand for permanent staff in May, closely followed by Hotel & Catering. Nonetheless, steep increases in vacancies were also seen across the other eight monitored job categories.

May survey data also pointed to a broad-based increase in demand for short-term staff, led by Hotel & Catering. The softest rise in temporary vacancies was meanwhile signalled for Retail.

Comments

Commenting on the latest survey results, Neil Carberry, Chief Executive of the REC, said:

“These numbers show a hugely positive jobs market if you are looking for work. While the pace of growth has dropped after a stellar first quarter, by any normal measure there are still lots of vacancies out there, offering improved wages. For companies, they emphasise again that hiring is a challenge in this market, and getting it right matters – the help of professional recruiters will be vital. The market for temporary work is stabilising faster than for permanent staff, which could suggest a little caution creeping into employers’ thinking in the face of high inflation.

“But compared to pre-pandemic, labour supply is still the big issue we have to solve. With over half a million people missing from the jobs market, and demand still growing strongly, this is a big, strategic issue for the UK. Growth is essential to funding public services and paying higher wages sustainably. Any plan for growth must include action to help people into work from inactivity, skills reform, support for innovation on productivity and targeted immigration reform.”

Claire Warnes, Head of Education, Skills and Productivity at KPMG UK, said:

“For over a year now, we have seen a sustained mismatch in the growing numbers of vacancies in every sector of the economy against the inadequate supply of skilled candidates. The initial effects of this have been obvious, in particular the driving up of starting salaries. However, perhaps we are starting to see wider consequences of the systemic issues in the available workforce to support the growth opportunities which employers are chasing. We’ve seen the softest rise in permanent placements and temporary billings for over a year, and the growth in total vacancies hit a three month low. Candidate availability is still falling, so it remains a hot market for those well-qualified in their sectors. But are employers starting to rethink their growth plans because of skills shortages which are proving difficult to fix as quickly as they need?

“Job-seekers and employers alike are facing the greatest cost of living challenges in recent years. As these are expected to increase, at least in the short term, we will need to closely monitor the impact on recruitment confidence as well as growth appetite in key sectors of the economy. Employers are also continuing to face rising business costs and supply chain disruption, which will test the resilience of many as geo-political and economic turbulence continues.”

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.

Aspire Travel | 01223 855442 (Multi Award Winning)
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!

Start chatting now!
Start chatting now!
What can we help you with today?
Connecting...
None of our operators are available at the moment. Please, leave a message or try again later.
Sadly, our operators are unavailable. Please, try again later.
:
:
:
Have a question? Need some help? Chat to one of our experts now!
:
:
This chat session has ended
Was this conversation useful? Vote this chat session.
Good Bad