A steep increase in hiring activity has been seen across the UK in 2022, with starting salaries at a record high.

KPMG and the REC’s Report on Jobs found that a high demand for staff and a lack of candidates, has driven up rates of starting pay for both permanent and temporary staff. 

The survey covered 400 recruitment and employment consultancies across the UK, and showed the demand for workers continues to rise, despite a decline in vacancies overall. 

Quicker fall in overall supply of candidates

The rate of decline in candidate availability rose for the first time in five months in January, though not as steep as those seen during last summer.

The downturn was driven by a quicker drop in permanent staff supply, as temporary candidate numbers fell at a slower pace.

Commenting on the latest survey results, Neil Carberry, Chief Executive of the REC, said: “With competition for staff still hot, companies are having to raise pay rates for new starters to attract the best people. And the cost of living crisis means there is also more pressure from job seekers who want a pay rise.” 

But he warned that pay on its own was not the only important factor – companies needed to think about all aspects of their offer to candidates, to ensure they get the staff they need.

Employers keen to hire temporary workers

The underlying data showed a drop in demand for permanent staff, with short-term vacancies expanding at a quicker rate.

The increase in demand for temp staff was seen across the most prominent sectors in January, including nursing and healthcare, blue-collar and hospitality.

Claire Warnes, Head of Education, Skills and Productivity at KPMG UK, said: “Some sectors are continuing to show the strain of high demand for permanent and temporary roles. In particular, the IT and Computing, and Nursing, Healthcare and Medical sectors saw the greatest vacancy increases for yet another month, reflecting the significant workforce and skills challenges which these sectors have faced, and which the pandemic has accelerated.”

Warnes said it will be important to monitor the job market as both businesses and candidates aim to make the most of the reduction in Covid restrictions.