Employment growth accelerated in November

Employment growth accelerated in November, while pay pressures strengthened

Novemberís Report on Jobs survey signalled that permanent staff placements rose at the fastest rate for thirty-two months, while growth of temp billings hit a three-month high. Employment was driven up by strengthened demand for staff, and competition for talent resulted in increased inflation of wages and salaries.

The Report on Jobs, published today by the Recruitment and Employment Confederation and KPMG, provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies and employers, as well as data on national newspaper recruitment advertising.

Commenting on the latest survey results, Michael Carter, People Services Partner at KPMG said:

ìOf particular note in November is the rate of pay inflation for permanent staff, which is the highest in almost 6 years. Temporary staff also experienced a robust rise in pay inflation. This will clearly bring problems for employers in terms of increasing pay bills, and they will want to ensure that their ever-increasing investment in staff is justified in terms of increasing returns.

ìIn the lead up to Christmas, employers will particularly want to ensure that productivity and performance is maximised, by, for example, focusing reward to the achievement of business strategy. Specifically targeted commission and bonus plans can help drive the required business behaviours, whilst ensuring that the overall pay bill remains affordable in the context of the organisationís achievements.î

Also commenting on the report, Marcia Roberts, Chief Executive Officer, REC said:

ìIn his pre-budget report the Chancellor recognised that steps had to be taken to address the skills deficit that continues to hinder Britainís global competitiveness. We urge the Government to ensure that skills training is tailored to business need so that the month on month skills shortages, highlighted in Report on Jobs, can be tackled.î

Growth of employee appointments accelerated...
Latest data signalled continued growth of recruitment consultanciesí employee appointments during November. Permanent staff placements increased at the sharpest rate for thirty-two months, underpinned by rising numbers of job vacancies at employers. Meanwhile, temporary/contract staff billings rose at the fastest pace for three months.

...supported by further expansion of demand for staff
Consultancies reported a further expansion of job vacancies at client businesses in November. Moreover, the rate of expansion accelerated to a twenty-three month high. Growth of demand remained stronger for permanent staff than for temporary workers.

Pay inflation strengthened...
Permanent staff salary inflation picked up to a seventy-one month high in November, driven by robust demand for staff and shortages of suitable candidates. Temporary/contract staff pay also increased, with the rate of inflation close to Octoberís twenty-two month high.

...as skill shortages persisted
There were further reports of skill shortages in November, mainly amongst candidates for permanent jobs, as temporary/contract staff availability was broadly unchanged since the previous month.

To view the full report please click here