In line with the easing of COVID-19 restrictions and the re-opening of certain sectors, the rate of hiring has increased over the last month. 

According to the latest KPMG and REC UK Report on Jobs survey, permanent vacancies rose at a record pace – at the fastest rate for over 23 years – while vacancies for temporary workers also grew substantially.

At the same time, there was a clear deterioration in staff supply with overall candidate availability declining at the quickest rate since May 2017. Lower staff supply and rising vacancies led to further increases in starting pay, with both starting salaries and temp pay expanding at sharper rates than in April. This was largely attributed to lingering pandemic uncertainty and a subsequent reluctance to seek out new roles, fewer EU candidates and furloughed staff.

In light of the increased demand and low supply, the  rates of starting pay was pushed up again in May. Starting salaries for permanent staff rose to the greatest extent since September 2018, while temp wage inflation hit a near two-year high.

Regionally, it was the North of England which saw the steepest increase in permanent staff appointments of all four monitored English regions. However, the South of England also saw a substantial recovery whilst the rise in vacancies in the Midlands and London stayed largely stagnant.

Vacancies continued to rise more sharply in the private than the public sector, with the quickest increase in demand seen for permanent staff in the private sector.

IT & Computing and Hotel and Catering saw the steepest increase in vacancies although demand for permanent workers rose across all ten monitored job categories during May.

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

With demand for workers in May increasing at the fastest rate in 23 years, the jobs market seems to be firing on all cylinders, and we need this momentum to continue for our economy and businesses to fully bounce back.

But the deterioration in staff supply intensified this month, with overall candidate availability declining at the quickest rate since May 2017. This is a worrying trend and the message is clear: we need businesses and recruiters working alongside Government to urgently address the skills gap by supporting candidates and employees to upskill and reskill to move into new roles. This will be crucial to our recovery from the pandemic and the levelling up of opportunities across the UK.

Kate Shoesmith, Deputy CEO of the REC, said:

Now is the time for action. With demand spiking, the skills and labour shortages that already existed in the UK have come into sharper focus – and COVID has only made them worse. This is the most pressing issue in the jobs market right now, and has the potential to slow down the recovery.

Employers must think about how they can attract the staff they need, for example by looking at the wage and benefits package on offer – there is particular demand for more flexible and hybrid work. But government also needs to urgently look at improving access to work and opportunities for everyone to participate in training that will lead to a job. This should start with careers information that signals where job openings are being created and funding for the relevant work-related training.


*The KPMG and REC, UK Report on Jobs is compiled by IHS Markit from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.