shutterstock_148839800The number of people placed in jobs by recruitment consultancies rose at a strong and accelerated pace in July. Permanent placements increased at the sharpest rate since March 2010, while temp billings were up at the fastest pace in almost two-and-a-half years, while  overall job vacancies increased at the strongest rate in six years. Pay growth is also gathering pace with the rate of inflation of permanent staff salaries at its highest for over two years. Temp pay rates rose at their sharpest since January 2008.

However, recruitment consultants indicated a decline in the availability of candidates to fill job vacancies.  Lower availability was seen for both permanent and temporary staff, with permanent staff registering the sharpest fall. Higher permanent staff appointments were seen in all four monitored English regions during the latest month, with the fastest expansion being recorded in the North. Although growth of temp billings was broad-based across all the English regions the strongest increases were seen in the North and the South.

Public sector demand for permanent staff fell in July, following a rise in the previous month. Public sector demand for temp staff meanwhile rose at a solid pace that was the fastest so far this year. However private sector demand for staff strengthened in July. Stronger rates of growth were seen for both permanent and temporary workers.

Higher levels of demand were seen for all nine types of permanent staff  although the strongest rate of expansion was indicated for Engineering workers, as has been the case throughout the past four months. The slowest vacancy growth was recorded for Blue Collar staff. All nine categories of short-term staff showed improved levels of demand with Nursing/Medical/Care posting the fastest growth, followed by Construction. The weakest expansion was for Accounting/Financial workers.

REC chief executive Kevin Green says: “The jobs market continues to skyrocket with permanent employment and temporary placements at three and two year highs, and vacancy growth accelerating to a six year high. A combination of confidence returning to the UK economy and higher employer demand have contributed to this impressive set of figures.”

“Starting salaries accelerated in July reaching the highest for 26 months. This is an early indicator of increased competition for candidates and skills shortages in a growing number of sectors. In addition to this, hourly rates for temp workers increased at the strongest rate since January 2008.”

“We anticipate starting salaries increasing over the coming months as the economy strengthens and competition to secure talent hots up.”

Bernard Brown, Partner and Head of Business Services at KPMG, said: “With house price and service sector figures moving in an upward direction, indications are that the economy is getting stronger. Confidence is certainly evident amongst employers; with many conserving cash for a number of years, they are beginning to invest in their people and, as the search for talent is stepped up, the jobs market is looking buoyant again.”

“High levels of demand for staff were signalled across every sector we analysed and the same can be said across each region of the UK. In a sign of the surge in confidence, the latest figures also represent the sharpest increase in permanent placements for more than 3 years and the biggest growth in demand for six. This does, of course mean that a gap exists between the demand for staff and the quality of candidates available so the onus is on candidates to improve their skills and prove their capability.”

“If the current trend continues employers will, however, be faced with another conundrum. For some time staff have sat tight refusing to move when job security was low. Now the best staff will be looking for better offers so employers will need to strike a balance between recruiting new blood and retaining their best employees.”