Permanent staff appointments increase at fastest pace for four months in December

The IHS Markit/REC Report on Jobs – published today – provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies. 

Faster growth of permanent staff placements

Permanent staff placements increased at the quickest pace since August at the end of the year as agencies reported on strong demand for staff. At the same time, growth of temp billings remained sharp despite softening since November.

Demand for staff softens slightly, but remains sharp

Staff vacancies grew at the softest rate for one year in December. That said, demand for staff remained sharp overall and firmly above the average seen over the 20-year survey history.

Strong starting salary growth maintained…

Permanent starting salaries continued to rise markedly in December amid reports of candidate shortages and robust demand for staff. Temp pay also increased sharply, with the rate of inflation quickening to a three-month high.

…as candidate availability continues to fall sharply

The availability of candidates to fulfil permanent roles declined sharply at the end of 2017, with the rate of deterioration among the fastest seen over the past two years. The supply of temporary labour also fell at a historically marked pace in December, despite the rate of reduction softening since November.

Regional variation

On a regional basis, the Midlands continued to signal the fastest increase in permanent placements at the end of the year. Meanwhile, the least marked rate of growth was seen in London.

London registered the fastest increase in temp billings of all five monitored UK regions in December. Nonetheless, rates of expansion were also sharp elsewhere.

Sector variation

December data pointed to rising demand for both private and public sector staff, though growth remained sharper for the former.

The steepest increase in vacancies was seen for permanent workers in the private sector, closely followed by demand for temporary workers in the sector. Relatively modest rates of growth were meanwhile seen for permanent and temporary vacancies across the public sector.

Accounting/Financial led a broad-based expansion of demand for permanent workers in December. This was closely followed by IT & Computing and Engineering. The slowest growth was signalled for Construction and Hotel & Catering.

Latest data signalled a further rise in vacancies for temporary staff across all nine monitored categories, led by Nursing/Medical/Care. Blue Collar and Accounting/Financial scored second and third place in the rankings, respectively.

Kevin Green, REC Chief Executive says:

 “The number of people finding jobs via recruiters is growing, even while the overall employment rate is plateauing. This suggests that more employers are turning to recruiters to help them fill vacancies as candidate availability continues to fall and recruiting good people becomes that much harder.

 “Nursing and medical staff remain the most in demand for temporary roles – further evidence of the strain the NHS is feeling on filling vacancies. Recruiters are reporting a vast number of job areas that employers are finding hard to fill including, welders, van drivers and, for the first time, baristas.

 “Employers as a response to these candidate shortages are offering increased starting salaries to attract staff but while this has been the case for some time it isn’t translating into significant wage growth across the economy yet.

 “Early in the New Year, people often think about changing jobs, so employers are going to have to think carefully about how they can both retain existing capabilities and find the new hires they need as competition for people intensifies. Bosses should consider going to wider talent pools and to be inventive about how to improve their employer brand and make themselves an even more attractive place to work.”

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