New research shows that recruitment activity continues to rise across the UK, yet the availability of candidates is plummeting.

According to the latest UK Report on Jobs survey from KPMG and REC, recruitment rose sharply at the start of the third quarter, with permanent staff appointments and temporary billings both at near-record rates.

Not only this, a growth in demand for staff hit a new high as COVID-19 restrictions continue to ease and economic activity carries on growing.

Latest data indicates that the demand for permanent staff has hit a fresh series record, and the increase in temporary vacancies was the steepest since November 1997.

Demand for permanent staff has risen across all of the ten job categories monitored by the report, with IT and Computing leading.

Whilst recruitment activity rises, the data also shows that the availability of candidates suffered a severe drop in July.

Notably, it is the impact of Brexit, rather than the pandemic, that was cited as a key factor in reducing the supply of workers, particularly temporary staff.

Other factors relevant in the second-sharpest fall in the rate of candidate availability were listed as concerns over job security, and an overall low unemployment rate.

Rising demand for staff has led to a massive increase in permanent starting salaries, with the rate of salary inflation the sharpest seen in nearly 24 years of data collection.

Alongside this, the hourly pay of temporary and contract staff rose at the second-quickest rate since the survey began.

Commenting on the results, Claire Warnes, Partner and Head of Education, Skills and Productivity and KPMG UK, said:

With salaries for new hires increasing at their quickest rate in 24 years and a sharp rise in permanent placements in July, job seekers should be taking advantage of the buoyant market to land their dream role.

Kate Shoesmith, Deputy Chief Executive of the REC, said:

Recruiters are working hard to fill places for employers eager to build back and recover but their job is made more difficult by worker shortages across all sectors.

Pay increases alone, however, won’t solve the demand that has been building up over recent months. We need an immigration system that flexes to meet demand as was promised, and business and government need a long-term plan for skilling up workers.