• Permanent placements increase at slowest pace in 18 months
  • Faster rise in temp billings
  • Strong salary growth amid falling candidate availability

The Recruitment and Employment Confederation (REC) and KPMG Report on Jobs – published today – provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies.

Growth of permanent placements eases to 18-month low…

The number of people placed in permanent jobs by surveyed recruitment consultancies continued to rise in November. However, the rate of growth moderated further, reaching its slowest for one-and-a-half years.

…but temp billings rise at faster rate

Agency billings from the employment of temporary and contract staff increased again in November, with the rate of expansion quickening from that recorded in the previous survey period.

Strong salary growth

Starting salaries for successful candidates placed in permanent jobs rose further, with the rate of growth quickening from October’s eight-month low and comfortably above the survey’s long-run trend. Temp pay growth remained solid and slightly faster than in the previous month.

Further marked drop in staff availability

The rate of decline in permanent candidate availability remained marked in November, with a range of skills reported in short-supply. Temp staff availability also fell, albeit at the slowest rate since March.

Regional and sector variation

Midlands-based consultancies indicated the strongest growth of permanent placements, while the slowest rise was signalled in London.

Growth of temp billings was fastest in the Midlands and weakest in the South of England during the latest survey period.

Data signalled that growth of demand remained considerably stronger for private sector roles than public sector vacancies in November. In both cases, permanent staff saw a faster rise than temporary/contract employees.

Engineering remained top of the demand for staff ‘league table’ in November, with Accounting/Financial in second place. The slowest rise in demand was reported for Hotel & Catering workers.

IT & Computing employees were the most in-demand type of short-term staff in November, fractionally ahead of Blue Collar. Construction workers registered the weakest growth of demand.

Kevin Green, REC chief executive, says:

“It’s been a strong year for the UK labour market and it’s a sign of continuing business confidence that employers are expanding their permanent workforces and are prepared to make more generous offers to new recruits to attract the right people.  Over a quarter of recruiters say that starting salaries for equivalent jobs are getting better by the month, driven by competition between employers for quality candidates.

“If there’s a cloud on the horizon for 2015 it’s the intensifying skills shortages which now spans many sectors and is particularly acute in high-skilled areas like engineering, IT and medicine. It’s not just about graduates, vacancies for skilled manual jobs are getting harder to fill as well. The shortage of licensed HGV drivers and forklift operators could mean retailers struggle to meet the Christmas demand generated by ‘Cyber Monday’ and eager shoppers on the high streets.

“In the longer term, skills shortages could jeopardise delivery of major infrastructure projects announced in this week’s Autumn Statement.”

Bernard Brown, Partner and Head of Business Services at KPMG, comments:

“Not much sign of a happy Christmas in the job market. The rate at which permanent contracts are being signed is rising at the slowest rate in 18 months.

“This follows an unexpected fall in investment in the UK in Q3. 

“With political uncertainty in the UK, and in particular the country’s position on Europe, could this be the start of a negative trend in the jobs market? Let’s hope not and that the initiatives announced in the Autumn Statement convert to new employment opportunities.”