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Skills shortages bite as permanent placements rise at slowest rate in eight months

The Markit/REC Report on Jobs – published today – provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies.

Company Profile

REC

Key points:

  • Weaker rise in permanent placements amid EU referendum uncertainty
  • Temp billings growth eases from 13-month high
  • Pay growth softens but remains marked

Summary:

The Markit/REC Report on Jobs – published today – provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies. 

Slower growth of staff appointments...

Permanent staff placements continued to rise in May, but the rate of expansion eased to an eight-month low. Temporary/contract staff billings growth also eased, following April’s 13-month high.          

...despite robust demand for staff

Vacancies rose at a marked pace in May, with the rate of growth quickening slightly since April. Stronger increases were recorded for both permanent and short-term employees. 

Pay growth moderates…

Permanent staff salary growth eased to a 31-month low in May, although remained above the survey’s historical average. Having increased at the strongest rate in almost nine years during April (partly driven by the new National Living Wage), temporary/contract staff pay posted a slower but still marked rise in May. 

...as decline in candidate availability eases further

Further reductions in staff availability were signalled in May. However, slower falls were indicated for both permanent and temporary/contract staff, with the latest declines the least marked in over two-and-a-half years.

Regional and sector variation

Recruiters based in the South of England recorded the strongest rise in permanent placements during May. London was the only region where placements fell, albeit moderately.

Temp billings increased across the English regions, with the strongest growth indicated in the North. 

Private sector demand for staff continued to rise at a marked pace in May, with similar rates of growth signalled for permanent and short-term workers. More modest increases in demand were signalled for public sector roles.

Engineering workers saw the strongest growth of demand for their services during May, followed by Accounting/Financial, Nursing/Medical/Care and IT & Computing. The slowest rise was reported for Hotel & Catering.    

Broad-based growth of demand for temporary/contract staff was recorded in May. Nursing/Medical/Care workers saw comfortably the strongest growth of demand, while the slowest rise was indicated for Executive/Professional staff.

Comments:

REC chief executive Kevin Green says:

“UK businesses are now facing candidate shortages in nearly every sector of the economy. From engineering firms, to catering companies, schools and hospitals, we need more people with the right skills for the jobs that are available. Despite this, employers are showing uncertainty about hiring in the run up to the EU referendum.

“Whatever happens post June 23rd we need to ensure a sensible approach to immigration is taken, so that employers have access to the people they need. Sourcing workers from outside the UK is going to be an ongoing necessity if we are to continue seeing the British economy grow.

“The hospitality sector is a case in point. The latest data shows a surge in demand for staff from hotels and restaurants, as they expect many holidaymakers to stay in the UK this summer rather than travel abroad.

“The UK job market has been incredibly successful over the last seven years because of its dynamism and flexibility. Policy-makers have a responsibility not to derail that success.”

www.rec.uk.com